BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        AB 819|
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                                      CONSENT 


          Bill No:  AB 819
          Author:   Irwin (D), et al.
          Introduced:2/26/15  
          Vote:     21  

           SENATE EDUCATION COMMITTEE:  8-0, 6/17/15
           AYES:  Liu, Runner, Block, Hancock, Leyva, Monning, Pan, Vidak
           NO VOTE RECORDED:  Mendoza

           SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  78-0, 5/14/15 (Consent) - See last page for  
            vote

           SUBJECT:   Public postsecondary education:  alumni associations


          SOURCE:    Author

          DIGEST:   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. 

          ANALYSIS: 
          
          Existing law:

          1)Prohibits, the California Financial Information Privacy Act  
            (Act), 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  








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            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 consumer has not "opted out" of the sharing of  
            the information.  (Financial Code § 4054.6)

          2)Authorizes, until January 1, 2016, 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)

          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  








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               for the target audience.

             c)   An Internet Web link to the form on the Trustees or  
               Regents Web site, or the affected alumni or auxiliary  
               association, as applicable.

          4)Deletes obsolete reporting requirements.

          Comments

          1)Affinity programs. Existing law authorizes the disclosure of  
            private information by the CSU and UC for purposes of  
            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  








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            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 CSU and 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 agreements, information on how  
            many alumni have opted out of the agreements, and whether the  
            individual 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.


          FISCAL EFFECT:  Appropriation:                No     Fiscal  
          Com.:            Yes          Local:          No




          SUPPORT:   (Verified6/30/15)










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          California State Student Association
          California State University
          University of California


          OPPOSITION:   (Verified6/30/15)


          None received

          ASSEMBLY FLOOR:  78-0, 5/14/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Linder, Medina


          Prepared by:Kathleen Chavira / ED. / (916) 651-4105
          6/30/15 14:00:39


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