Amended in Assembly April 18, 2016

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

begin insert

(Coauthors: Assembly Members Dodd, Gallagher, and Lackey)

end insert
begin insert

(Coauthor: Senator Hertzberg)

end insert

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 isbegin delete made orend deletebegin insert made,end insert an incapacitated person or a protected individual for whom a guardian or conservator has been appointed,begin insert or a person under the jurisdiction of a county welfare department or county probation department who has been placed in a foster care setting and is under 16 years of age at the time a request forend insertbegin insert a security freeze is made,end insert upon that consumer’s representative’s request and compliance with certain requirements. The bill would require a consumer credit reporting agency to send written confirmation of the security freeze to the protected consumer’s representative within 10 days of the placement of the security freeze.

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 isbegin delete eitherend deletebegin insert anyend insert
6 of the 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.

begin insert

11
(3) Under the jurisdiction of a county welfare department or
12county probation department, has been placed in a foster care
13setting, and is under 16 years of age at the time a request for
14placement of a security freeze is made.

end insert

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

16(1) Identifies a protected consumer.

17(2) Was created by a consumer credit reporting agency solely
18for the purpose of complying with this section.

19(3) Is not otherwise authorized to be created or used to consider
20the protected consumer’s creditworthiness, credit standing, credit
21capacity, character, general reputation, personal characteristics,
22or mode of living.

23(c) begin insert(1)end insertbegin insertend insert “Representative” means a person who provides to a
24consumer credit reporting agency sufficient proof of authority to
25act on behalf of a protected consumer.

begin insert

26
(2) For a protected consumer who has been placed in a foster
27care setting, “representative” means either of the following:

end insert
begin insert

28
(A) A county welfare department or its agent or designee.

end insert
begin insert

29
(B) A county probation department or its agent or designee.

end insert
begin insert

P3    1
(3) For a protected consumer who has been placed in a foster
2care setting, “representative” does not mean a foster parent.

end insert

3(d) “Security freeze” means:

4(1) If a consumer credit reporting agency does not have a file
5pertaining to a protected consumer, a restriction that:

6(A) Is placed on the protected consumer’s record in accordance
7with this section.

8(B) Prohibits the consumer credit reporting agency from
9releasing the protected consumer’s record except as authorized in
10this section.

11(2) If a consumer credit reporting agency has a file pertaining
12to a protected consumer, a restriction that:

13(A) Is placed on the protected consumer’s consumer report in
14accordance with this section.

15(B) Prohibits the consumer credit reporting agency from
16releasing the protected consumer’s consumer report or any
17information derived from the protected consumer’s consumer
18report except as authorized in this section.

19(e) “Sufficient proof of authority” means documentation that
20shows that a representative has authority to act on behalf of a
21protected consumer in a financial matter. This documentation
22includes, but is not limited to:

23(1) A court order or relevant enabling document issued by a
24court.

25(2) A legally sufficient and valid power of attorney, or a durable
26power of attorney.

27(3) A written, notarized statement signed by a representative
28that expressly describes the authority of the representative to act
29on behalf of a protected consumer, including a temporary
30conservator or temporary guardian.

begin insert

31
(4) A written communication from a county welfare department
32or its agency or designee or a county probation department or its
33agent or designee certifying that the protected consumer is a foster
34youth under its jurisdiction.

end insert

35(f) “Sufficient proof of identification” means information or
36documentation that identifies a protected consumer or a
37representative of a protected consumer. This information or
38documentation includes, but is not limited to:

39(1) A social security number or a copy of a social security card
40issued by the Social Security Administration.

P4    1(2) A certified copy or official copy of a birth certificate issued
2by the entity authorized to issue the birth certificate.

3(3) A copy of a driver’s license, an identification issued by the
4Department of Motor Vehicles, or any other government-issued
5identification.

6(4) A copy of a bill for telephone, sewer, septic tank, water,
7electric, oil, or natural gas services that shows a name and a home
8address.

begin insert

9
(5) A written communication from a county welfare department
10or its agency or designee or a county probation department or its
11agent or designee certifying that the protected consumer is a foster
12youth under its jurisdiction.

end insert
13

SEC. 2.  

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

14

1785.11.10.  

Sections 1785.11.9 to 1785.11.11, inclusive, do
15not apply to the use of a protected consumer’s report or record by
16any of the following:

17(a) A person or entity listed in subdivision (l) of Section
181785.11.2, or Section 1785.11.4 or 1785.11.6.

19(b) A person administering a credit file monitoring subscription
20service to which the representative of the protected consumer has
21subscribed on behalf of the protected consumer.

22(c) A person who provides the protected consumer or the
23protected consumer’s representative with a copy of the protected
24consumer’s consumer report at the request of the protected
25consumer or at the request of the protected consumer’s
26representative.

begin delete

27(d) A person or entity that maintains or is a database used solely
28for one of the following purposes:

29(1) Criminal record information.

30(2) Personal loss history information.

31(3) Fraud prevention or protection.

32(4) Employment screening.

33(5) Tenant screening.

end delete
begin insert

34
(d) Any state or local agency, law enforcement agency, trial
35court, or private collection agency acting pursuant to a court
36order, warrant, or subpoena.

end insert
begin insert

37
(e) A child support agency acting pursuant to Chapter 2
38(commencing with Section 17400) of Division 17 of the Family
39Code and Title IV-D of the Social Security Act (42 U.S.C. et seq.).

end insert
begin insert

P5    1
(f) The State Department of Health Care Services or its agents
2or assigns acting to investigate Medi-Cal fraud.

end insert
begin insert

3
(g) The Franchise Tax Board or its assigns acting to investigate
4or collect delinquent taxes or unpaid court orders or to fulfill any
5of its other statutory responsibilities.

end insert
6

SEC. 3.  

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

7

1785.11.11.  

(a) A consumer credit reporting agency shall place
8a security freeze for a protected consumer if both of the following
9occur:

10(1) The consumer credit reporting agency receives a request
11from the protected consumer’s representative for the placement
12of the security freeze pursuant to this section.

13(2) The protected consumer’s representative does all of the
14following:

15(A) Submits the request to the consumer credit reporting agency
16at the address or other point of contact and in the manner specified
17by the consumer credit reporting agency.

18(B) Provides to the consumer credit reporting agency sufficient
19proof of identification of the protected consumer and the
20representative.

21(C) Provides to the consumer credit reporting agency sufficient
22proof of authority to act on behalf of the protected consumer.

23(D) Pays to the consumer credit reporting agency a fee as
24authorized by subdivision (i).

25(b) If a consumer credit reporting agency does not have a file
26pertaining to a protected consumer when the consumer credit
27reporting agency receives a request pursuant to paragraph (1) of
28subdivision (a), the consumer credit reporting agency shall create
29a record for the protected consumer.

30(c) If a protected consumer’s representative requests a security
31freeze, the consumer credit reporting agency shall disclose the
32process for placing and removing a security freeze.

33(d) Within 30 days after receiving a request that meets the
34requirements of subdivision (a), a consumer credit reporting agency
35shall place a security freeze for the protected consumer. The
36consumer credit reporting agency shall send written confirmation
37of the security freeze to the protected consumer’s representative
38within 10 days of the placement of the security freeze.

39(e) Unless a security freeze for a protected consumer is removed
40pursuant to subdivision (h) or (j), a consumer credit reporting
P6    1agency shall not release the protected consumer’s consumer report,
2any information derived from the protected consumer’s consumer
3report, or any record created for the protected consumer.

4(f) A security freeze for a protected consumer placed pursuant
5to this section shall remain in effect until either of the following
6occurs:

7(1) The protected consumer or the protected consumer’s
8representative requests that the consumer credit reporting agency
9remove the security freeze in accordance with subdivision (h).

10(2) The security freeze is removed in accordance with
11subdivision (j).

12(g) To remove a security freeze, a protected consumer or a
13protected consumer’s representative shall do all of the following:

14(1) Submit a request for removal of the security freeze to the
15consumer credit reporting agency at the address or other point of
16contact and in the manner specified by the consumer credit
17reporting agency.

18(2) Provide to the consumer credit reporting agency:

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

20(i) Proof that the sufficient proof of authority for the protected
21consumer’s representative to act on behalf of the protected
22consumer is no longerbegin delete valid.end deletebegin insert valid, he or she has been emancipated,
23or he or she is 16 years of age or older.end insert

24(ii) Sufficient proof of identification of the protected consumer.

25(B) If the request is made by the representative of a protected
26consumer:

27(i) Sufficient proof of identification of the protected consumer
28and the representative.

29(ii) Sufficient proof of authority to act on behalf of the protected
30consumer.

31(3) Pay to the consumer credit reporting agency a fee as
32authorized by subdivision (i).

33(h) Within 30 days after receiving a request that meets the
34requirements of subdivision (g), a consumer credit reporting agency
35shall remove a security freeze for a protected consumer.

36(i) (1) Except as provided in paragraph (2), a consumer credit
37 reporting agency may not charge a fee for any service performed
38pursuant to this section.

P7    1(2) A consumer credit reporting agency is authorized to charge
2a reasonable fee, not exceeding ten dollars ($10), for each
3placement or removal of a security freeze for a protected consumer.

4(3) Notwithstanding paragraph (2), a consumer credit reporting
5agency shall not charge any fee pursuant to this section under any
6of the following circumstances:

7(A) The protected consumer’s representative has received a
8report of alleged identity theft against the protected consumer
9under Section 530.5 of the Penal Code and has provided copy of
10the report to the consumer credit reporting agency.

11(B) The request for the placement or removal of a security freeze
12is for a protected consumer who is under 16 years of age at the
13time of the request and the consumer credit reporting agency has
14a report pertaining to the protected consumer.

begin insert

15
(C) The request for the placement or removal of a security freeze
16is for a protected consumer who has been placed in a foster care
17setting.

end insert

18(j) A consumer credit reporting agency is authorized to remove
19a security freeze for a protected consumer or to delete a record of
20a protected consumer if the security freeze was placed or the record
21was created based upon a material misrepresentation of fact by the
22protected consumer or the protected consumer’s representative.

23(k) A consumer credit reporting agency may develop procedures
24involving the use of telephone,begin insert mail,end insert fax, the Internet, or other
25electronic media to receive and process a request for a protected
26 consumer’s security freeze to be placed or removed.



O

    96