Amended in Assembly March 17, 2016

Amended in Assembly March 3, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1580


Introduced by Assembly Members Gatto and Irwin

January 5, 2016


An act to add Sections 1785.11.9, 1785.11.10, and 1785.11.11 to the Civil Code, relating to consumer credit reports.

LEGISLATIVE COUNSEL’S DIGEST

AB 1580, as amended, Gatto. Consumer credit reports: security freezes: protected consumer.

Existing state law defines and regulates consumer credit reports and authorizes a consumer to place a security freeze on his or her credit report by making a request in writing by mail to a consumer credit reporting agency. Existing state law requires a consumer credit reporting agency to place the security freeze on the consumer’s credit report no later than 3 business days after receiving the consumer’s request.

This bill would require a consumer credit reporting agency to place a security freeze for a protected consumer, defined as an individual who is under 16 years of age at the time a request for the placement of a security freeze is made or an incapacitated person or a protected individual for whom a guardian or conservator has been appointed, upon that consumer’s representative’s request and compliance with certain requirements. The bill would require a consumer credit reporting agency to sendbegin insert writtenend insert confirmationbegin insert of the security freezeend insert to the protectedbegin delete consumer that a freeze was placedend deletebegin insert consumer’s representativeend insert within 10 days of the placement of thebegin insert securityend insert freeze.begin delete The bill would also require a consumer credit reporting agency to notify a protected consumer within 10 days if his or her frozen credit report was released without proper authorization.end delete

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

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

P2    1

SECTION 1.  

Section 1785.11.9 is added to the Civil Code, to
2read:

3

1785.11.9.  

For purposes of Sections 1785.11.10 and
41785.11.11, the following terms shall have the following meanings:

5(a) “Protected consumer” means an individual who is either of
6the following:

7(1) Under 16 years of age at the time a request for the placement
8of a security freeze is made.

9(2) An incapacitated person or a protected person for whom a
10guardian or conservator has been appointed.

11(b) “Record” means a compilation of information that:

12(1) Identifies a protected consumer.

13(2) Was created by a consumer credit reporting agency solely
14for the purpose of complying with this section.

15(3) Is not otherwise authorized to be created or used to consider
16the protected consumer’s creditworthiness, credit standing, credit
17capacity, character, general reputation, personal characteristics,
18or mode of living.

19(c) “Representative” means a person who provides to a consumer
20credit reporting agency sufficient proof of authority to act on behalf
21of a protected consumer.

22(d) “Security freeze” means:

23(1) If a consumer credit reporting agency does not have a file
24pertaining to a protected consumer, a restriction that:

25(A) Is placed on the protected consumer’s record in accordance
26with this section.

27(B) Prohibits the consumer credit reporting agency from
28releasing the protected consumer’s record except as authorized in
29this section.

30(2) If a consumer credit reporting agency has a file pertaining
31to a protected consumer, a restriction that:

P3    1(A) Is placed on the protected consumer’s consumer report in
2accordance with this section.

3(B) Prohibits the consumer credit reporting agency from
4releasing the protected consumer’s consumer report or any
5information derived from the protected consumer’s consumer
6report except as authorized in this section.

7(e) “Sufficient proof of authority” means documentation that
8shows that a representative has authority to act on behalf of a
9protected consumer in a financial matter. This documentation
10includes, but is not limited to:

11(1) A court order or relevant enabling document issued by a
12court.

13(2) A legally sufficient and valid power of attorney, or a durable
14power of attorney.

15(3) A written, notarized statement signed by a representative
16that expressly describes the authority of the representative to act
17on behalf of a protected consumer, including a temporary
18conservator or temporary guardian.

19(f) “Sufficient proof of identification” means information or
20documentation that identifies a protected consumer or a
21representative of a protected consumer. This information or
22documentation includes, but is not limited to:

23(1) A social security number or a copy of a social security card
24issued by the Social Security Administration.

25(2) A certified copy or official copy of a birth certificate issued
26by the entity authorized to issue the birth certificate.

27(3) A copy of a driver’s license, an identification issued by the
28Department of Motor Vehicles, or any other government-issued
29identification.

30(4) A copy of a bill for telephone, sewer, septic tank, water,
31electric, oil, or natural gasbegin delete services,end deletebegin insert servicesend insert that shows a name
32and a home address.

33

SEC. 2.  

Section 1785.11.10 is added to the Civil Code, to read:

34

1785.11.10.  

Sections 1785.11.9 to 1785.11.11, inclusive, do
35not apply to the use of a protectedbegin delete consumerend deletebegin insert consumer’send insert report or
36record by any of the following:

37(a) A person or entity listed in subdivision (l) of Section
381785.11.2, or Section 1785.11.4 or 1785.11.6.

39(b) A person administering a credit file monitoring subscription
40servicebegin delete to which the protected consumer has subscribed orend delete to which
P4    1the representative of the protected consumer has subscribed on
2behalf of the protected consumer.

3(c) A person who provides the protected consumer or the
4protected consumer’s representative with a copy of the protected
5consumer’s consumer reportbegin delete onend deletebegin insert at theend insert request of the protected
6consumer orbegin insert at the requestend insert of the protected consumer’s
7representative.

8(d) A person or entity that maintains or is a database used solely
9for one of the following purposes:

10(1) Criminal record information.

11(2) Personal loss history information.

12(3) Fraud prevention or protection.

13(4) Employment screening.

14(5) Tenant screening.

15

SEC. 3.  

Section 1785.11.11 is added to the Civil Code, to read:

16

1785.11.11.  

(a) A consumer credit reporting agency shall place
17a security freeze for a protected consumer if both of the following
18occur:

19(1) The consumer credit reporting agency receives a request
20from the protected consumer’s representative for the placement
21of the security freeze pursuant to this section.

22(2) The protected consumer’s representative does all of the
23following:

24(A) Submits the request to the consumer credit reporting agency
25at the address or other point of contact and in the manner specified
26by the consumer credit reporting agency.

27(B) Provides to the consumer credit reporting agency sufficient
28proof of identification of the protected consumer and the
29representative.

30(C) Provides to the consumer credit reporting agency sufficient
31proof of authority to act on behalf of the protected consumer.

32(D) Pays to the consumer credit reporting agency a fee as
33authorized by subdivisionbegin delete (h).end deletebegin insert (i).end insert

34(b) If a consumer credit reporting agency does not have a file
35pertaining to a protected consumer when the consumer credit
36reporting agency receives a request pursuant to paragraph (1) of
37subdivision (a), the consumer credit reporting agency shall create
38a record for the protected consumer.

begin insert

P5    1(c) If a protected consumer’s representative requests a security
2freeze, the consumer credit reporting agency shall disclose the
3process for placing and removing a security freeze.

end insert
begin delete

36 4(c)

end delete

5begin insert(d)end insert Within 30 days after receiving a request that meets the
6requirements of subdivision (a), a consumer credit reporting agency
7shall place a security freeze for the protectedbegin delete consumer and send
8confirmationend delete
begin insert consumer. The consumer credit reporting agency
9shall send written confirmation of the security freezeend insert
to the
10protectedbegin delete consumer that the freeze was placedend deletebegin insert consumer’s
11representativeend insert
within 10 days of the placement of thebegin insert securityend insert
12 freeze.

begin delete

13(d)

end delete

14begin insert(e)end insert Unless a security freeze for a protected consumer is removed
15pursuant to subdivisionbegin delete (g) or (i),end deletebegin insert (h) or (j),end insert a consumer credit
16reporting agency shall not release the protected consumer’s
17consumer report, any information derived from the protected
18consumer’s consumer report, or any record created for the protected
19consumer.

begin delete

20(e)

end delete

21begin insert(f)end insert A security freeze for a protected consumer placed pursuant
22to this section shall remain in effect until either of the following
23occurs:

24(1) The protected consumer or the protected consumer’s
25representative requests that the consumer credit reporting agency
26remove the security freeze in accordance with subdivisionbegin delete (g).end deletebegin insert (h).end insert

27(2) The security freeze is removed in accordance with
28subdivisionbegin delete (i).end deletebegin insert (j).end insert

begin delete

29(f)

end delete

30begin insert(g)end insert To remove a security freeze, a protected consumer or a
31protected consumer’s representative shall do all of the following:

32(1) Submit a request for removal of the security freeze to the
33consumer credit reporting agency at the address or other point of
34contact and in the manner specified by the consumer credit
35reporting agency.

36(2) Provide to the consumer credit reporting agency:

37(A) If the request is made by the protected consumer:

38(i) Proof that the sufficient proof of authority for the protected
39consumer’s representative to act on behalf of the protected
40consumer is no longer valid.

P6    1(ii) Sufficient proof of identification of the protected consumer.

2(B) If the request is made by the representative of a protected
3consumer:

4(i) Sufficient proof of identification of the protected consumer
5and the representative.

6(ii) Sufficient proof of authority to act on behalf of the protected
7consumer.

8(3) Pay to the consumer credit reporting agency a fee as
9authorized by subdivisionbegin delete (h).end deletebegin insert (i).end insert

begin delete

10(g)

end delete

11begin insert(h)end insert Within 30 days after receiving a request that meets the
12requirements of subdivisionbegin delete (f),end deletebegin insert (g),end insert a consumer credit reporting
13agency shall remove a security freeze for a protected consumer.

begin delete

14(h)

end delete

15begin insert(i)end insert (1) Except as provided in paragraph (2), a consumer credit
16 reporting agency may not charge a fee for any service performed
17pursuant to this section.

18(2) A consumer credit reporting agency is authorized to charge
19a reasonable fee, not exceeding ten dollars ($10), for each
20placement or removal of a security freeze for a protected consumer.

21(3) Notwithstanding paragraph (2), a consumer credit reporting
22agency shall not charge any fee pursuant to this section under any
23of the following circumstances:

24(A) The protected consumer’s representative has received a
25report of alleged identity theft against the protected consumer
26under Section 530.5 of the Penal Code and has provided copy of
27the report to the consumer credit reporting agency.

28(B) The request for the placement or removal of a security freeze
29is for a protected consumer who is under 16 years of age at the
30time of the request and the consumer credit reporting agency has
31a report pertaining to the protected consumer.

begin delete

32(i)

end delete

33begin insert(j)end insert A consumer credit reporting agency is authorized to remove
34a security freeze for a protected consumer or to delete a record of
35a protected consumer if the security freeze was placed or the record
36was created based upon a material misrepresentation of fact by the
37protected consumer or the protected consumer’s representative.

begin delete

38(j)

end delete

39begin insert(k)end insert A consumer credit reporting agency may develop procedures
40involving the use of telephone, fax, the Internet, or other electronic
P7    1media to receive and process a request for a protectedbegin delete consumer
2creditend delete
begin insert consumer’s securityend insert freeze to be placed or removed.

begin delete

3(k) A consumer credit reporting agency shall notify the protected
4consumer within 10 days if the protected consumer’s frozen credit
5record was released without proper authorization.

end delete


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