BILL ANALYSIS Ó
AB 1220
Page 1
Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1220 (Skinner) - As Amended: May 6, 2013
Policy Committee: Banking and
Finance Vote: 7-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires a contract between a consumer reporting
agency (CRA) and a user of a consumer credit report to include a
statement that federal law prohibits a CRA from requiring a user
(a retailer for example) of a consumer credit report from
disclosing the contents of the report to a consumer who has had
an adverse credit action. Requires users to share any
information with a consumer if an adverse action is taken.
Authorizes the Attorney General or district attorneys to bring a
civil action for violations.
FISCAL EFFECT
Negligible fiscal impact.
COMMENTS
1)Purpose . Credit reports describe consumers' credit worthiness
and detail their credit history. These reports are requested
by banks when consumers apply for loans, by credit card
companies when consumers apply for credit cards, by landlords
when consumer apply for housing and by employers when consumer
apply for jobs. The author contends, due to the scope and
significance of credit reports, it is vital that reports are
accurate and that consumers see complete versions of their
credit reports to verify their accuracy. The author notes,
according to a recent study by the Federal Trade Commission,
40 million Americans report inaccuracies on their credit
reports.
2)Background . A December 2012 study by the Federal Trade
AB 1220
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Commission (FTC) found widespread problems with the accuracy
of credit reports. According to the FTC report, the three
national credit reporting agencies (NCRAs) received
approximately eight million contacts from consumers in 2011 to
initiate disputes about the accuracy of one or more items on
their credit files. Some were minor and did not result in a
change in score, but an alarming number were significant in
the FTC report, one in four consumers identified errors on
their credit reports that might affect their credit scores;
and four out of five consumers who filed disputes had their
credit report modified.
3)Federal regulation. There is federal regulation of financial
services and the applicable federal law in this case is the
Fair Credit Reporting Act (FCRA). FCRA specifically preempts
state regulation of certain topics, for example duties placed
on the furnishers of credit information. The state is allowed
to regulate if not inconsistent with FCRA.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081