BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 819
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|Author: |Irwin |
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|Version: |February 26, 2015 Hearing Date: |
| | June 17, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Kathleen Chavira |
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Subject: Public postsecondary education: alumni associations
SUMMARY
This bill eliminates the sunset on the authority of the
California State University (CSU) and the University of
California (UC) to distribute the names and addresses of alumni
for purposes of participation in affinity programs, expands the
opt-out disclosure methods which may be used, and eliminates
related obsolete reporting requirements.
BACKGROUND
Existing law, the California Financial Information Privacy Act
(Act), prohibits financial institutions from sharing or selling
personally identifiable nonpublic information without obtaining
a consumer's consent, as specified. The act requires that a
consumer consent to an "opt in" for sharing private information
with an unaffiliated third party, and requires that consumers be
given the opportunity to "opt out" of sharing private
information with a financial institution's affiliates.
Under the Act, when a financial institution and an affinity
partner (i.e. an organization or business entity that is not a
financial institution) have an agreement to issue an affinity
card (i.e. a credit card in the name of the affinity partner) or
other financial product or service, disclosure of information is
generally limited to provision of name, address, telephone
number and electronic mail address. Such disclosure is
permitted only if specified notice requirements are met and the
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consumer has not "opted out" of the sharing of the information.
(Financial Code § 4054.6)
Existing law, until January 1, 2016, authorizes the governing
bodies and alumni associations of the CSU and UC to distribute
the names and addresses of alumni to businesses with whom they
have affinity-partner agreements if specified privacy and
disclosure requirements are met. These provisions apply to the
UC only to the extent that the regents adopt a resolution doing
so. (Education Code § 89090 and § 92360)
ANALYSIS
This bill:
1)Deletes the sunset on the authority extended to the governing
bodies and alumni associations of the CSU and the UC to
distribute the names and addresses of alumni to businesses
with whom they have affinity-partner agreements.
2)Deletes the requirement that the "opt out" form, which the
institution must provide as part of the requirement that
alumni be noticed that personal information may be disclosed,
be a separate document.
3)Expands the opt-out disclosure mediums which may be used to
include any of the following, as specified:
a) A separate document.
b) Incorporation into another communication piece
intended for the target audience.
c) An internet web link to the form on the Trustees
or Regents website, or the affected alumni or auxiliary
association, as applicable.
4)Deletes obsolete reporting requirements.
STAFF COMMENTS
1)Affinity programs. Current law authorizes the disclosure of
private information by the California State University (CSU)
and the University of California (UC) for purposes of
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participation in affinity programs. An affinity program
provides a means whereby a tax-exempt organization may
generate funds by allowing the use of its name and/or logo to
endorse products or services. In the case of the UC and CSU,
through partnerships with commercial entities, affinity
programs allow alumni organizations to offer a variety of
financial products to graduates and alumni members, such as
group rates and discounts for home and auto insurance,
mortgage programs, credit cards, and other credit lines. In
return for allowing access to alumni association mailing
lists, the affinity partner pays a fee to the campus
association.
2)History. When the California Financial Information Privacy Act
(CFIPA), which prohibits financial institutions from sharing
or selling personally identifiable nonpublic information
without obtaining a consumer's consent, was enacted, it
required that a consumer consent to an "opt in" for sharing
private information with an unaffiliated third party, and
required that consumers be given the opportunity to "opt out"
of sharing private information with a financial institution's
affiliates.
Although the UC and CSU report that their alumni associations
had been executing affinity agreements for more than 20 years,
the enactment of the CFIPA, coupled with the existing
prohibition on the distribution of personal information under
the California Information Practices Act of 1977 (CIPA),
resulted in ambiguity about the authority of agencies subject
to the CIPA to enter into affinity agreements with financial
institutions. SB 569 (Torlakson, Chapter 498, Statutes of
2005) was enacted to specifically authorize the UC and CSU to
distribute the names and addresses of alumni for participation
in affinity programs until 2011, subject to specified notice
and disclosure requirements.
3)Reporting requirements. The authority granted by SB 569 was
extended to January 1, 2016 by subsequent legislation, which
also declared the Legislature's
intent that the California State University (CSU) and the
University of California (UC) report on the implementation of
affinity partnership agreements to the Senate and Assembly
Judiciary Committees by July 1, 2014. Among other things, the
report was to include a survey of affinity partnership
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agreements, information on how many alumni have opted out of
the agreements, and whether the Institution is complying with
the opt out requirements.
According to the UC report, affinity program revenue has
supported student scholarships, created programs and
communications designed to build a greater sense of UC
community, volunteerism and philanthropy, and developed
activities for alumni and student career networking,
continuing education and community volunteerism. The number of
alumni opting out of information sharing ranges from a low of
1,702 at UC Davis to a high of 68,603 at UC Berkeley.
According to the CSU report, among other things, at the
systemwide level the CSU has developed an optional toll-free
opt-out telephone line which is currently used by 13 of the
CSU campuses. Of its more than 2.8 million alumni, about
258,000 have opted out from information sharing.
SUPPORT
California State Student Association
California State University
University of California
OPPOSITION
None received.
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