Amended in Assembly April 22, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1220

Introduced by Assembly Member Skinner

February 22, 2013

An act to amend Section 1785.15 of begin insert , and to add Sections 1785.10.1 and 1785.20.4 to, end insert the Civil Code, relating to consumer credit.

LEGISLATIVE COUNSEL’S DIGEST

AB 1220, as amended, Skinner. Consumer credit reporting: files: inspections.

Existing law requires a consumer credit reporting agency, upon request and proper identification of any consumer, to allow the consumer to visually inspect all files maintained regarding that consumer at the time of the request. Existing law additionally grants a consumer the right to request and receive a written copy of the file. begin insert Existing federal law prohibits a consumer credit reporting agency from prohibiting a user of a consumer credit report furnished by the agency from disclosing the contents of the report to the consumer if adverse action has been taken against the consumer by the user based on the report. end insert

This bill would require, if a consumer requests a written copy of his or her file, that the consumer receive the same information that is provided to a user of a consumer credit report, unless otherwise specified.

begin insert

The bill would make it unlawful for a consumer credit reporting agency to prohibit, or to dissuade or attempt to dissuade, a user of a consumer credit report furnished by the credit reporting agency from providing a copy of the consumer’s credit report to the consumer, upon the consumer’s request, if the user has taken adverse action against the consumer based upon the report. The bill would require that a contract between a credit reporting agency and a user of a consumer credit report include a statement that federal law prohibits a consumer credit reporting agency from prohibiting a user of consumer credit reports from disclosing the contents of the report to the user, as specified. The bill would provide that a contract that violates these provisions is void and that the Attorney General or the district attorney of the county in which a violation of this section occurs may bring a civil action, or intervene in any civil action, to enjoin the enforcement of the contract.

end insert begin insert

The bill would provide a consumer the right to request and to receive a copy of his or her consumer credit report that is used in an adverse action against the consumer from a user of the report who takes the adverse action. The bill would require that, if a consumer authorizes a consumer credit reporting agency to furnish a consumer credit report for an extension of credit or any other lawful purpose, the user of the consumer credit report provide the consumer a specified notice in this regard.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1785.10.1 is added to the end insert begin insert Civil Code end insert begin insert , to
read: end insert

begin insert

begin insert 1785.10.1. end insert   

(a) It is unlawful for a consumer credit reporting
agency to prohibit in any manner, including, but not limited to, in
the terms of a contract enforceable in the state, or to dissuade or
attempt to dissuade, a user of a consumer credit report furnished
by the credit reporting agency from providing a copy of the
consumer’s credit report to the consumer, upon the consumer’s
request, if the user has taken adverse action against the consumer
based in whole or in part upon information in the report. A contract
between a credit reporting agency and a user of a consumer credit
report for the provision of consumer credit reports shall include
a statement that federal law prohibits a consumer credit reporting
agency from prohibiting a user of consumer credit reports from
disclosing the contents of the report to the user if adverse action
has been taken by the user based in whole or in part on the report.

(b) A contract in violation of this section is void as contrary to
public policy. The Attorney General or the district attorney of the
county in which a violation of this section occurs may bring a civil
action, or intervene in any civil action, to enjoin the enforcement
of a contract that violates this section.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 1785.15 of the Civil Code is amended to read:

1785.15.  

(a) A consumer credit reporting agency shall supply
files and information required under Section 1785.10 during normal
business hours and on reasonable notice. If a consumer requests
a written copy of his or her file, the consumer shall receive the
same information that is provided to a user of a consumer credit
report unless the consumer specifies otherwise. In addition to the
disclosure provided by this chapter and any disclosures received
by the consumer, the consumer has the right to request and receive
all of the following:

(1) Either a decoded written version of the file or a written copy
of the file, including all information in the file at the time of the
request, with an explanation of any code used.

(2) A credit score for the consumer, the key factors, and the
related information, as defined in and required by Section
1785.15.1.

(3) A record of all inquiries, by recipient, that result in the
provision of information concerning the consumer in connection
with a credit transaction not initiated by the consumer and that
were received by the consumer credit reporting agency in the
12-month period immediately preceding the request for disclosure
under this section.

(4) The recipients, including end users specified in Section
1785.22, of any consumer credit report on the consumer which the
consumer credit reporting agency has furnished:

(A) For employment purposes within the two-year period
preceding the request.

(B) For any other purpose within the 12-month period preceding
the request.

Identification for purposes of this paragraph shall include the
name of the recipient or, if applicable, the fictitious business name
under which the recipient does business disclosed in full. If
requested by the consumer, the identification shall also include
the address of the recipient.

(b) Files maintained on a consumer shall be disclosed promptly
as follows:

(1) In person, at the location where the consumer credit reporting
agency maintains the trained personnel required by subdivision
(d), if he or she appears in person and furnishes proper
identification.

(2) By mail, if the consumer makes a written request with proper
identification for a copy of the file or a decoded written version
of that file to be sent to the consumer at a specified address. A
disclosure pursuant to this paragraph shall be deposited in the
United States mail, postage prepaid, within five business days after
the consumer’s written request for the disclosure is received by
the consumer credit reporting agency. Consumer credit reporting
agencies complying with requests for mailings under this section
shall not be liable for disclosures to third parties caused by
mishandling of mail after the mailings leave the consumer credit
reporting agencies.

(3) A summary of all information contained in files on a
consumer and required to be provided by Section 1785.10 shall
be provided by telephone, if the consumer has made a written
request, with proper identification for telephone disclosure.

(4) Information in a consumer’s file required to be provided in
writing under this section may also be disclosed in another form
if authorized by the consumer and if available from the consumer
credit reporting agency. For this purpose, a consumer may request
disclosure in person pursuant to Section 1785.10, by telephone
upon disclosure of proper identification by the consumer, by
electronic means if available from the consumer credit reporting
agency, or by any other reasonable means that is available from
the consumer credit reporting agency.

(c) “Proper identification,” as used in subdivision (b) means
that information generally deemed sufficient to identify a person.
Only if the consumer is unable to reasonably identify himself or
herself with the information described above may a consumer
credit reporting agency require additional information concerning
the consumer’s employment and personal or family history in order
to verify his or her identity.

(d) The consumer credit reporting agency shall provide trained
personnel to explain to the consumer any information furnished
him or her pursuant to Section 1785.10.

(e) The consumer shall be permitted to be accompanied by one
other person of his or her choosing, who shall furnish reasonable
identification. A consumer credit reporting agency may require
the consumer to furnish a written statement granting permission
to the consumer credit reporting agency to discuss the consumer’s
file in that person’s presence.

(f) Any written disclosure by a consumer credit reporting agency
to any consumer pursuant to this section shall include a written
summary of all rights the consumer has under this title and, in the
case of a consumer credit reporting agency that compiles and
maintains consumer credit reports on a nationwide basis, a toll-free
telephone number that the consumer can use to communicate with
the consumer credit reporting agency. The written summary of
rights required under this subdivision is sufficient if in substantially
the following form:

“You have a right to obtain a copy of your credit file from a
consumer credit reporting agency. You may be charged a
reasonable fee not exceeding eight dollars ($8). There is no fee,
however, if you have been turned down for credit, employment,
insurance, or a rental dwelling because of information in your
credit report within the preceding 60 days. The consumer credit
reporting agency must provide someone to help you interpret the
information in your credit file.

You have a right to dispute inaccurate information by contacting
the consumer credit reporting agency directly. However, neither
you nor any credit repair company or credit service organization
has the right to have accurate, current, and verifiable information
removed from your credit report. Under the Federal Fair Credit
Reporting Act, the consumer credit reporting agency must remove
accurate, negative information from your report only if it is over
seven years old. Bankruptcy information can be reported for 10
years.

If you have notified a consumer credit reporting agency in
writing that you dispute the accuracy of information in your file,
the consumer credit reporting agency must then, within 30 business
days, reinvestigate and modify or remove inaccurate information.
The consumer credit reporting agency may not charge a fee for
this service. Any pertinent information and copies of all documents
you have concerning an error should be given to the consumer
credit reporting agency.

If reinvestigation does not resolve the dispute to your satisfaction,
you may send a brief statement to the consumer credit reporting
agency to keep in your file, explaining why you think the record
is inaccurate. The consumer credit reporting agency must include
your statement about disputed information in a report it issues
about you.

You have a right to receive a record of all inquiries relating to
a credit transaction initiated in 12 months preceding your request.
This record shall include the recipients of any consumer credit
report.

You may request in writing that the information contained in
your file not be provided to a third party for marketing purposes.

You have a right to place a “security alert” in your credit report,
which will warn anyone who receives information in your credit
report that your identity may have been used without your consent.
Recipients of your credit report are required to take reasonable
steps, including contacting you at the telephone number you may
provide with your security alert, to verify your identity prior to
lending money, extending credit, or completing the purchase, lease,
or rental of goods or services. The security alert may prevent credit,
loans, and services from being approved in your name without
your consent. However, you should be aware that taking advantage
of this right may delay or interfere with the timely approval of any
subsequent request or application you make regarding a new loan,
credit, mortgage, or cellular phone or other new account, including
an extension of credit at point of sale. If you place a security alert
on your credit report, you have a right to obtain a free copy of your
credit report at the time the 90-day security alert period expires.
A security alert may be requested by calling the following toll-free
telephone number: (Insert applicable toll-free telephone number).
California consumers also have the right to obtain a “security
freeze.”

You have a right to place a “security freeze” on your credit
report, which will prohibit a consumer credit reporting agency
from releasing any information in your credit report without your
express authorization. A security freeze must be requested in
writing by mail. The security freeze is designed to prevent credit,
loans, and services from being approved in your name without
your consent. However, you should be aware that using a security
freeze to take control over who gets access to the personal and
financial information in your credit report may delay, interfere
with, or prohibit the timely approval of any subsequent request or
application you make regarding a new loan, credit, mortgage, or
cellular phone or other new account, including an extension of
credit at point of sale. When you place a security freeze on your
credit report, you will be provided a personal identification number
or password to use if you choose to remove the freeze on your
credit report or authorize the release of your credit report for a
specific party or period of time after the freeze is in place. To
provide that authorization you must contact the consumer credit
reporting agency and provide all of the following:

(1) The personal identification number or password.

(2) Proper identification to verify your identity.

(3) The proper information regarding the third party who is to
receive the credit report or the period of time for which the report
shall be available to users of the credit report.

A consumer credit reporting agency must authorize the release
of your credit report no later than three business days after
receiving the above information.

A security freeze does not apply when you have an existing
account and a copy of your report is requested by your existing
creditor or its agents or affiliates for certain types of account
review, collection, fraud control, or similar activities.

If you are actively seeking credit, you should understand that
the procedures involved in lifting a security freeze may slow your
application for credit. You should plan ahead and lift a freeze,
either completely if you are shopping around, or specifically for
a certain creditor, before applying for new credit.

A consumer credit reporting agency may not charge a fee to a
consumer for placing or removing a security freeze if the consumer
is a victim of identity theft and submits a copy of a valid police
report or valid Department of Motor Vehicles investigative report.
A person 65 years of age or older with proper identification shall
not be charged a fee for placing an initial security freeze, but may
be charged a fee of no more than five dollars ($5) for lifting,
removing, or replacing a security freeze. All other consumers may
be charged a fee of no more than ten dollars ($10) for each of these
steps.

You have a right to bring civil action against anyone, including
a consumer credit reporting agency, who improperly obtains access
to a file, knowingly or willfully misuses file data, or fails to correct
inaccurate file data.

If you are a victim of identity theft and provide to a consumer
credit reporting agency a copy of a valid police report or a valid
investigative report made by a Department of Motor Vehicles
investigator with peace officer status describing your
circumstances, the following shall apply:

(1) You have a right to have any information you list on the
report as allegedly fraudulent promptly blocked so that the
information cannot be reported. The information will be unblocked
only if (A) the information you provide is a material
misrepresentation of the facts, (B) you agree that the information
is blocked in error, or (C) you knowingly obtained possession of
goods, services, or moneys as a result of the blocked transactions.
If blocked information is unblocked, you will be promptly notified.

(2) You have a right to receive, free of charge and upon request,
one copy of your credit report each month for up to 12 consecutive
months.”

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1785.20.4 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 1785.20.4. end insert   

(a) The federal Fair Credit Reporting Act (15
U.S.C. Sec. 1681 et seq.) prohibits a credit reporting agency from
stopping a user of a consumer report from disclosing the contents
of the report to the consumer whom it concerns if adverse action
is taken based on the report. A consumer has the right to request
and to receive a copy of his or her consumer credit report that is
used in an adverse action against the consumer from a user of the
report who takes the adverse action against the consumer.

(b) If a consumer authorizes a consumer credit reporting agency
to furnish a consumer credit report for an extension of credit or
any other lawful purpose, the user of the consumer credit report
shall notify the consumer orally and in writing, in substantially
the form provided below, of the following:

“You have authorized us to obtain a copy of your credit report
as part of an application for credit or for some other lawful
purpose. If we take adverse action on your application and our
decision is based in whole or in part upon your credit report, you
have a right to obtain a copy of the report from us that we receive
from the consumer credit reporting agency. Neither state nor
federal law prevents you from obtaining a copy of your credit
report from us under those circumstances.”

end insert