Amended in Assembly May 5, 2016

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

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

(begin deleteCoauthor: Senator end deletebegin insertCoauthors: Senators Cannella and end insertHertzberg)

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, an incapacitated person or a protected individual for whom a guardian or conservator has been appointed, 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 for a security freeze is made, 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 is any 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(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.

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) (1) “Representative” means a person who provides to a
24consumer credit reporting agency sufficient proof of authority to
25act on behalf of a protected consumer.

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

P3    1(A) A county welfare department or its agent or designee.

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

3(3) For a protected consumer who has been placed in a foster
4care setting, “representative” does not mean a foster parent.

5(d) “Security freeze” means:

6(1) If a consumer credit reporting agency does not have a file
7pertaining to a protected consumer, a restriction that:

8(A) Is placed on the protected consumer’s record in accordance
9with this section.

10(B) Prohibits the consumer credit reporting agency from
11releasing the protected consumer’s record except as authorized in
12this section.

13(2) If a consumer credit reporting agency has a file pertaining
14to a protected consumer, a restriction that:

15(A) Is placed on the protected consumer’s consumer report in
16accordance with this section.

17(B) Prohibits the consumer credit reporting agency from
18releasing the protected consumer’s consumer report or any
19information derived from the protected consumer’s consumer
20report except as authorized in this section.

21(e) “Sufficient proof of authority” means documentation that
22shows that a representative has authority to act on behalf of a
23protected consumer in a financial matter. This documentation
24includes, but is not limited to:

25(1) A court order or relevant enabling document issued by a
26court.

27(2) A legally sufficient and valid power of attorney, or a durable
28power of attorney.

29(3) A written, notarized statement signed by a representative
30that expressly describes the authority of the representative to act
31on behalf of a protected consumer, including a temporary
32conservator or temporary guardian.

33(4) A written communication from a county welfare department
34or itsbegin delete agencyend deletebegin insert agentend insert or designee or a county probation department
35or its agent or designee certifying that the protected consumer is
36a foster youth under its jurisdiction.

37(f) “Sufficient proof of identification” means information or
38documentation that identifies a protected consumer or a
39representative of a protected consumer. This information or
40documentation includes, but is not limited to:

P4    1(1) A social security number or a copy of a social security card
2issued by the Social Security Administration.

3(2) A certified copy or official copy of a birth certificate issued
4by the entity authorized to issue the birth certificate.

5(3) A copy of a driver’s license, an identification issued by the
6Department of Motor Vehicles, or any other government-issued
7identification.

8(4) A copy of a bill for telephone, sewer, septic tank, water,
9electric, oil, or natural gas services that shows a name and a home
10address.

11(5) A written communication from a county welfare department
12or itsbegin delete agencyend deletebegin insert agentend insert or designee or a county probation department
13or its agent or designee certifying that the protected consumer is
14a foster youth under its jurisdiction.

15

SEC. 2.  

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

16

1785.11.10.  

Sections 1785.11.9 to 1785.11.11, inclusive, do
17not apply to the use of a protected consumer’s report or record by
18any of the following:

19(a) A person or entity listed inbegin insert paragraph (1) or (2) ofend insert
20 subdivision (l) of Section 1785.11.2, or Section 1785.11.4 or
211785.11.6.

22(b) A person administering a credit file monitoring subscription
23service to which the representative of the protected consumer has
24subscribed on behalf of the protected consumer.

25(c) A person who provides the protected consumer or the
26protected consumer’s representative with a copy of the protected
27consumer’s consumer report at the request of the protected
28consumer or at the request of the protected consumer’s
29representative.

30(d) Any state or local agency, law enforcement agency, trial
31court, or private collection agency acting pursuant to a court order,
32warrant, or subpoena.

33(e) A child support agency acting pursuant to Chapter 2
34(commencing with Section 17400) of Division 17 of the Family
35Code and Title IV-D of the Social Security Act (42 U.S.C.begin insert Sec.
36651end insert
et seq.).

37(f) The State Department of Health Care Services or its agents
38or assigns acting to investigate Medi-Cal fraud.

P5    1(g) The Franchise Tax Board or itsbegin insert agents orend insert assigns acting to
2investigate or collect delinquent taxes or unpaid court orders or to
3fulfill any of its other statutory responsibilities.

4

SEC. 3.  

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

5

1785.11.11.  

(a) A consumer credit reporting agency shall place
6a security freeze for a protected consumer if both of the following
7occur:

8(1) The consumer credit reporting agency receives a request
9from the protected consumer’s representative for the placement
10of the security freeze pursuant to this section.

11(2) The protected consumer’s representative does all of the
12following:

13(A) Submits the request to the consumer credit reporting agency
14at the address or other point of contact and in the manner specified
15by the consumer credit reporting agency.

16(B) Provides to the consumer credit reporting agency sufficient
17proof of identification of the protected consumer and the
18representative.

19(C) Provides to the consumer credit reporting agency sufficient
20proof of authority to act on behalf of the protected consumer.

21(D) Pays to the consumer credit reporting agency a fee as
22authorized by subdivision (i).

23(b) If a consumer credit reporting agency does not have a file
24pertaining to a protected consumer when the consumer credit
25reporting agency receives a request pursuant to paragraph (1) of
26subdivision (a), the consumer credit reporting agency shall create
27a record for the protected consumer.

28(c) If a protected consumer’s representative requests a security
29freeze, the consumer credit reporting agency shall disclose the
30process for placing and removing a security freeze.

31(d) Within 30 days after receiving a request that meets the
32requirements of subdivision (a), a consumer credit reporting agency
33shall place a security freeze for the protected consumer. The
34consumer credit reporting agency shall send written confirmation
35of the security freeze to the protected consumer’s representative
36within 10 days of the placement of the security freeze.

37(e) Unless a security freeze for a protected consumer is removed
38pursuant to subdivision (h) or (j), a consumer credit reporting
39agency shall not release the protected consumer’s consumer report,
P6    1any information derived from the protected consumer’s consumer
2report, or any record created for the protected consumer.

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

6(1) The protected consumer or the protected consumer’s
7representative requests that the consumer credit reporting agency
8remove the security freeze in accordance with subdivision (h).

9(2) The security freeze is removed in accordance with
10subdivision (j).

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

13(1) Submit a request for removal of the security freeze to the
14consumer credit reporting agency at the address or other point of
15contact and in the manner specified by the consumer credit
16reporting agency.

17(2) Provide to the consumer credit reporting agency:

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

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

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

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

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

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

30(3) Pay to the consumer credit reporting agency a fee as
31authorized by subdivision (i).

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

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

38(2) A consumer credit reporting agency is authorized to charge
39a reasonable fee, not exceeding ten dollars ($10), for each
40placement or removal of a security freeze for a protected consumer.

P7    1(3) Notwithstanding paragraph (2), a consumer credit reporting
2agency shall not charge any fee pursuant to this section under any
3of the following circumstances:

4(A) The protected consumer’s representative has received a
5report of alleged identity theft against the protected consumer
6under Section 530.5 of the Penal Code and has provided copy of
7the report to the consumer credit reporting agency.

8(B) The request for the placement or removal of a security freeze
9is for a protected consumer who is under 16 years of age at the
10time of the request and the consumer credit reporting agency has
11a report pertaining to the protected consumer.

12(C) The request for the placement or removal of a security freeze
13is for a protected consumer who has been placed in a foster care
14setting.

15(j) A consumer credit reporting agency is authorized to remove
16a security freeze for a protected consumer or to delete a record of
17a protected consumer if the security freeze was placed or the record
18was created based upon a material misrepresentation of fact by the
19protected consumer or the protected consumer’s representative.

20(k) A consumer credit reporting agency may develop procedures
21involving the use of telephone, mail, fax, the Internet, or other
22electronic media to receive and process a request for a protected
23 consumer’s security freeze to be placed or removed.



O

    95