Amended in Assembly May 6, 2013

Amended in Assembly April 22, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1220


Introduced by Assembly Member Skinner

February 22, 2013


An act to amend Sectionbegin delete 1785.15end deletebegin insert 1785.20end insert of, and to addbegin delete Sectionsend deletebegin insert Sectionend insert 1785.10.1begin delete and 1785.20.4end delete to, the Civil Code, relating to consumer credit.

LEGISLATIVE COUNSEL’S DIGEST

AB 1220, as amended, Skinner. Consumer credit reporting:begin delete files: inspections.end deletebegin insert adverse action.end insert

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. 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.

begin delete

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.

end delete
begin delete

The

end delete

begin insert Thisend insert 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.begin delete Theend deletebegin insert On and after July 1, 2014, theend insert 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 disclosingbegin insert a copy orend insert the contents of the report to the userbegin insert and allows a user to disclose this information to a consumerend insert, as specified. The bill wouldbegin delete 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 deletebegin insert authorize the Attorney General, among others, to bring a civil action, for a civil penalty not to exceed $5,000, against any credit reporting agency for a violation of these provisions.end insert

begin delete

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 delete
begin insert

Under existing law, if any person takes any adverse action with respect to any consumer, and the adverse action is based on any information contained in a consumer credit report, the person is required to, among other things, provide written notice of the adverse action to the consumer.

end insert
begin insert

This bill would require that notice to include a specified statement advising the consumer of his or her right to request the contents of, or a copy of, the report from the credit reporting agency.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P3    1

SECTION 1.  

Section 1785.10.1 is added to the Civil Code, to
2read:

3

1785.10.1.  

(a) It is unlawful for a consumer credit reporting
4agency to prohibit in any manner, including, but not limited to, in
5the terms of a contract enforceable in the state, or to dissuade or
6attempt to dissuade, a user of a consumer credit report furnished
7by the credit reporting agency from providing a copy of the
8consumer’s credit report to the consumer, upon the consumer’s
9request, if the user has taken adverse action against the consumer
10based in whole or in part upon information in the report.begin delete Aend deletebegin insert On and
11after July 1, 2014, any new or renewedend insert
contract between a credit
12reporting agency and a user of a consumer credit report for the
13provision of consumer credit reports shall include a statement that
14federal law prohibits a consumer credit reporting agency from
15prohibiting a user of consumer credit reports from disclosingbegin insert a
16copy orend insert
the contents of the report to thebegin delete userend deletebegin insert consumerend insert if adverse
17action has been taken by the user based in whole or in part on the
18reportbegin insert, and allows a user of consumer credit reports to disclose
19the report, or the contents of the report, to the consumer under
20those circumstancesend insert
.

begin delete

21(b) A contract in violation of this section is void as contrary to
22public policy. The Attorney General or the district attorney of the
23county in which a violation of this section occurs may bring a civil
24action, or intervene in any civil action, to enjoin the enforcement
25of a contract that violates this section.

end delete
begin insert

26(b) The Attorney General, any district attorney or city attorney,
27or a city prosecutor in any city or city and county having a full-time
28city prosecutor, may bring a civil action in any court of competent
29jurisdiction against any credit reporting agency violating this
30section for a civil penalty not to exceed five thousand dollars
31($5,000) which may be assessed and recovered in a civil action
32brought in the name of the people of the State of California.

end insert
begin delete
33

SEC. 2.  

Section 1785.15 of the Civil Code is amended to read:

34

1785.15.  

(a) A consumer credit reporting agency shall supply
35files and information required under Section 1785.10 during normal
36business hours and on reasonable notice. If a consumer requests
37a written copy of his or her file, the consumer shall receive the
38same information that is provided to a user of a consumer credit
P4    1report unless the consumer specifies otherwise. In addition to the
2disclosure provided by this chapter and any disclosures received
3by the consumer, the consumer has the right to request and receive
4all of the following:

5(1) Either a decoded written version of the file or a written copy
6of the file, including all information in the file at the time of the
7request, with an explanation of any code used.

8(2) A credit score for the consumer, the key factors, and the
9related information, as defined in and required by Section
101785.15.1.

11(3) A record of all inquiries, by recipient, that result in the
12provision of information concerning the consumer in connection
13with a credit transaction not initiated by the consumer and that
14were received by the consumer credit reporting agency in the
1512-month period immediately preceding the request for disclosure
16under this section.

17(4) The recipients, including end users specified in Section
181785.22, of any consumer credit report on the consumer which the
19consumer credit reporting agency has furnished:

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

22(B) For any other purpose within the 12-month period preceding
23the request.

24Identification for purposes of this paragraph shall include the
25name of the recipient or, if applicable, the fictitious business name
26under which the recipient does business disclosed in full. If
27requested by the consumer, the identification shall also include
28the address of the recipient.

29(b) Files maintained on a consumer shall be disclosed promptly
30as follows:

31(1) In person, at the location where the consumer credit reporting
32agency maintains the trained personnel required by subdivision
33(d), if he or she appears in person and furnishes proper
34identification.

35(2) By mail, if the consumer makes a written request with proper
36identification for a copy of the file or a decoded written version
37of that file to be sent to the consumer at a specified address. A
38disclosure pursuant to this paragraph shall be deposited in the
39United States mail, postage prepaid, within five business days after
40the consumer’s written request for the disclosure is received by
P5    1the consumer credit reporting agency. Consumer credit reporting
2agencies complying with requests for mailings under this section
3shall not be liable for disclosures to third parties caused by
4mishandling of mail after the mailings leave the consumer credit
5reporting agencies.

6(3) A summary of all information contained in files on a
7consumer and required to be provided by Section 1785.10 shall
8be provided by telephone, if the consumer has made a written
9request, with proper identification for telephone disclosure.

10(4) Information in a consumer’s file required to be provided in
11writing under this section may also be disclosed in another form
12if authorized by the consumer and if available from the consumer
13credit reporting agency. For this purpose, a consumer may request
14disclosure in person pursuant to Section 1785.10, by telephone
15upon disclosure of proper identification by the consumer, by
16electronic means if available from the consumer credit reporting
17agency, or by any other reasonable means that is available from
18the consumer credit reporting agency.

19(c) “Proper identification,” as used in subdivision (b) means
20that information generally deemed sufficient to identify a person.
21Only if the consumer is unable to reasonably identify himself or
22herself with the information described above may a consumer
23credit reporting agency require additional information concerning
24the consumer’s employment and personal or family history in order
25to verify his or her identity.

26(d) The consumer credit reporting agency shall provide trained
27personnel to explain to the consumer any information furnished
28him or her pursuant to Section 1785.10.

29(e) The consumer shall be permitted to be accompanied by one
30other person of his or her choosing, who shall furnish reasonable
31identification. A consumer credit reporting agency may require
32the consumer to furnish a written statement granting permission
33to the consumer credit reporting agency to discuss the consumer’s
34file in that person’s presence.

35(f) Any written disclosure by a consumer credit reporting agency
36to any consumer pursuant to this section shall include a written
37summary of all rights the consumer has under this title and, in the
38case of a consumer credit reporting agency that compiles and
39maintains consumer credit reports on a nationwide basis, a toll-free
40telephone number that the consumer can use to communicate with
P6    1the consumer credit reporting agency. The written summary of
2rights required under this subdivision is sufficient if in substantially
3the following form:

4“You have a right to obtain a copy of your credit file from a
5consumer credit reporting agency. You may be charged a
6reasonable fee not exceeding eight dollars ($8). There is no fee,
7however, if you have been turned down for credit, employment,
8 insurance, or a rental dwelling because of information in your
9credit report within the preceding 60 days. The consumer credit
10reporting agency must provide someone to help you interpret the
11information in your credit file.

12You have a right to dispute inaccurate information by contacting
13the consumer credit reporting agency directly. However, neither
14you nor any credit repair company or credit service organization
15has the right to have accurate, current, and verifiable information
16removed from your credit report. Under the Federal Fair Credit
17Reporting Act, the consumer credit reporting agency must remove
18accurate, negative information from your report only if it is over
19seven years old. Bankruptcy information can be reported for 10
20years.

21If you have notified a consumer credit reporting agency in
22writing that you dispute the accuracy of information in your file,
23the consumer credit reporting agency must then, within 30 business
24days, reinvestigate and modify or remove inaccurate information.
25The consumer credit reporting agency may not charge a fee for
26this service. Any pertinent information and copies of all documents
27you have concerning an error should be given to the consumer
28credit reporting agency.

29If reinvestigation does not resolve the dispute to your satisfaction,
30you may send a brief statement to the consumer credit reporting
31agency to keep in your file, explaining why you think the record
32is inaccurate. The consumer credit reporting agency must include
33your statement about disputed information in a report it issues
34about you.

35You have a right to receive a record of all inquiries relating to
36a credit transaction initiated in 12 months preceding your request.
37This record shall include the recipients of any consumer credit
38report.

39You may request in writing that the information contained in
40your file not be provided to a third party for marketing purposes.

P7    1You have a right to place a “security alert” in your credit report,
2which will warn anyone who receives information in your credit
3report that your identity may have been used without your consent.
4Recipients of your credit report are required to take reasonable
5steps, including contacting you at the telephone number you may
6provide with your security alert, to verify your identity prior to
7lending money, extending credit, or completing the purchase, lease,
8or rental of goods or services. The security alert may prevent credit,
9loans, and services from being approved in your name without
10your consent. However, you should be aware that taking advantage
11of this right may delay or interfere with the timely approval of any
12subsequent request or application you make regarding a new loan,
13credit, mortgage, or cellular phone or other new account, including
14an extension of credit at point of sale. If you place a security alert
15on your credit report, you have a right to obtain a free copy of your
16credit report at the time the 90-day security alert period expires.
17A security alert may be requested by calling the following toll-free
18telephone number: (Insert applicable toll-free telephone number).
19California consumers also have the right to obtain a “security
20freeze.”

21You have a right to place a “security freeze” on your credit
22report, which will prohibit a consumer credit reporting agency
23from releasing any information in your credit report without your
24express authorization. A security freeze must be requested in
25writing by mail. The security freeze is designed to prevent credit,
26loans, and services from being approved in your name without
27your consent. However, you should be aware that using a security
28freeze to take control over who gets access to the personal and
29financial information in your credit report may delay, interfere
30with, or prohibit the timely approval of any subsequent request or
31application you make regarding a new loan, credit, mortgage, or
32cellular phone or other new account, including an extension of
33credit at point of sale. When you place a security freeze on your
34credit report, you will be provided a personal identification number
35or password to use if you choose to remove the freeze on your
36credit report or authorize the release of your credit report for a
37specific party or period of time after the freeze is in place. To
38provide that authorization you must contact the consumer credit
39reporting agency and provide all of the following:

40(1) The personal identification number or password.

P8    1(2) Proper identification to verify your identity.

2(3) The proper information regarding the third party who is to
3receive the credit report or the period of time for which the report
4shall be available to users of the credit report.

5A consumer credit reporting agency must authorize the release
6of your credit report no later than three business days after
7receiving the above information.

8A security freeze does not apply when you have an existing
9account and a copy of your report is requested by your existing
10creditor or its agents or affiliates for certain types of account
11review, collection, fraud control, or similar activities.

12If you are actively seeking credit, you should understand that
13the procedures involved in lifting a security freeze may slow your
14application for credit. You should plan ahead and lift a freeze,
15either completely if you are shopping around, or specifically for
16a certain creditor, before applying for new credit.

17A consumer credit reporting agency may not charge a fee to a
18consumer for placing or removing a security freeze if the consumer
19is a victim of identity theft and submits a copy of a valid police
20report or valid Department of Motor Vehicles investigative report.
21A person 65 years of age or older with proper identification shall
22not be charged a fee for placing an initial security freeze, but may
23be charged a fee of no more than five dollars ($5) for lifting,
24removing, or replacing a security freeze. All other consumers may
25be charged a fee of no more than ten dollars ($10) for each of these
26steps.

27You have a right to bring civil action against anyone, including
28a consumer credit reporting agency, who improperly obtains access
29to a file, knowingly or willfully misuses file data, or fails to correct
30inaccurate file data.

31If you are a victim of identity theft and provide to a consumer
32credit reporting agency a copy of a valid police report or a valid
33investigative report made by a Department of Motor Vehicles
34investigator with peace officer status describing your
35circumstances, the following shall apply:

36(1) You have a right to have any information you list on the
37report as allegedly fraudulent promptly blocked so that the
38information cannot be reported. The information will be unblocked
39only if (A) the information you provide is a material
40misrepresentation of the facts, (B) you agree that the information
P9    1is blocked in error, or (C) you knowingly obtained possession of
2goods, services, or moneys as a result of the blocked transactions.
3If blocked information is unblocked, you will be promptly notified.

4(2) You have a right to receive, free of charge and upon request,
5one copy of your credit report each month for up to 12 consecutive
6months.”

7

SEC. 3.  

Section 1785.20.4 is added to the Civil Code, to read:

8

1785.20.4.  

(a) The federal Fair Credit Reporting Act (15 U.S.C.
9Sec. 1681 et seq.) prohibits a credit reporting agency from stopping
10a user of a consumer report from disclosing the contents of the
11report to the consumer whom it concerns if adverse action is taken
12based on the report. A consumer has the right to request and to
13receive a copy of his or her consumer credit report that is used in
14an adverse action against the consumer from a user of the report
15who takes the adverse action against the consumer.

16(b) If a consumer authorizes a consumer credit reporting agency
17to furnish a consumer credit report for an extension of credit or
18any other lawful purpose, the user of the consumer credit report
19shall notify the consumer orally and in writing, in substantially
20the form provided below, of the following:


22“You have authorized us to obtain a copy of your credit report
23as part of an application for credit or for some other lawful purpose.
24If we take adverse action on your application and our decision is
25based in whole or in part upon your credit report, you have a right
26to obtain a copy of the report from us that we receive from the
27consumer credit reporting agency. Neither state nor federal law
28prevents you from obtaining a copy of your credit report from us
29under those circumstances.”

end delete
30begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 1785.20 of the end insertbegin insertCivil Codeend insertbegin insert is amended to read:end insert

31

1785.20.  

(a) If any person takes any adverse action with respect
32to any consumer, and the adverse action is based, in whole or in
33part, on any information contained in a consumer credit report,
34that person shall do all of the following:

35(1) Provide written notice of the adverse action to thebegin delete consumer.end delete
36begin insert consumer that includes the following statement:end insert


begin insertend insert
begin insert

38“We have taken adverse action on your application and our
39decision is based in whole or in part upon your credit report. You
40have a right to request from us the contents of the report, or a copy
P10   1of the credit report itself, that we received from the consumer credit
2reporting agency. Neither state nor federal law prevents you from
3obtaining the contents of your credit report that we received about
4you, or a copy of the credit report itself, from us under those
5circumstances.”

end insert

begin insertend insert

7(2) Provide the consumer with the name, address, and telephone
8number of the consumer credit reporting agency which furnished
9the report to the person.

10(3) Provide a statement that the credit grantor’s decision to take
11adverse action was based in whole or in part upon information
12contained in a consumer credit report.

13(4) Provide the consumer with a written notice of the following
14rights of the consumer:

15(A) The right of the consumer to obtain within 60 days a free
16copy of the consumer’s consumer credit report from the consumer
17credit reporting agency identified pursuant to paragraph (2) and
18from any other consumer credit reporting agency which compiles
19and maintains files on consumers on a nationwide basis.

20(B) The right of the consumer under Section 1785.16 to dispute
21the accuracy or completeness of any information in a consumer
22credit report furnished by the consumer credit reporting agency.

23(b) Whenever credit or insurance for personal, family, or
24household purposes involving a consumer is denied or the charge
25for such credit is increased either wholly or in part because of
26information obtained from a person other than a consumer credit
27reporting agency bearing upon consumer’s credit worthiness or
28credit standing, the user of that information shall, within a
29reasonable period of time, and upon the consumer’s written request
30for the reasons for that adverse action received within 60 days after
31learning of the adverse action, disclose the nature and substance
32of the information to the consumer. The user of the information
33shall clearly and accurately disclose to the consumer his or her
34right to make such a written request at the time the adverse action
35is communicated to the consumer.

36(c) No person shall be held liable for any violation of this section
37if he or she shows by a preponderance of the evidence that at the
38time of the alleged violation he or she maintained reasonable
39procedures to assure compliance with this section.

P11   1(d) Nothing in this chapter shall excuse compliance with the
2requirements of Section 1787.2.



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