BILL ANALYSIS
AB 156
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Date of Hearing: April 7, 1997
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Louis J. Papan, Chairman
AB 156 (Murray) Co-Authors Lempert, Wayne and Senator Solis - As
Amended: April 17, 1997
SUBJECT : Personal information for credit reporting.
SUMMARY : Requires prospective users of consumer credit reports to
provide additional information and would make identity theft a
crime. Specifically, this bill :
1) Makes identity theft a crime punishable as either a misdemeanor
or felony.
2) Provides that retail sellers, who intend to issue credit to a
consumer who appears in person for an application, must provide
the consumer credit reporting agency with at least three
categories of information that match information within the file
maintained by the credit reporting agency on a consumer.
3) The categories of information may include, but are not limited
to, first and last name, month and date of birth, driver's license
number, place of employment, residence address, and social
security number. This information shall not include mother's
maiden name.
4) Requires a photo identification of the applicant for a credit
offer by a retail seller if the basis of the application is
submitted in person.
5) Provides that a prospective user intending to extend credit by
mail pursuant to a solicitation by mail, must mail the
extension of credit to the same address as the solicitation
unless the prospective user contacts the person to whom the
credit will be mailed and verifies the address change.
6) Requires that the procedures of credit reporting agencies
include storage in a permanent, individualized file for each
consumer of the information of identity used by the agency when
it furnishes credit reports on the consumer.
7) Provides that if a consumer submits to a credit reporting
agency a copy of a valid police report, the agency must promptly
delete any disputed information and notify the furnisher of
information that the item of information had been removed.
Requires that this disputed information be reinserted if the
report was issued fraudulently or the consumer agrees that the
report, or portions of the report, were filed erroneously.
8) Requires credit reporting agencies to provide a notice that the
consumer has the right to a reinvestigation of information
reinserted by the consumer credit reporting agency.
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9) Provides that no information may be reinserted in a consumer's
file after having been deleted because of dispute information
unless the person who
furnishes the information verifies the information is accurate.
And, if any information deleted from a consumer's file is
reinserted, requires the consumer credit reporting agency to
promptly notify the consumer of the reinsertion in writing, or if
authorized by the consumer, other means available to the agency.
10)Entitles prevailing plaintiffs who are seeking injunctive
relief only to court costs and attorney's fees.
FISCAL EFFECT : Potential costs to criminal justice agencies, such
as county jails and courts, due to the bill's creation of a
misdemeanor or a felony for the act of identity theft.
COMMENTS :
Purpose of this bill : The author and sponsors have introduced
this bill to address the problem of "identity theft" as it relates
to consumer credit reporting.
Background: The California Consumer Credit Reporting Agencies Act
was enacted in 1975 to protect consumers from "identity theft."
Among other things, this Act requires consumer credit reporting
agencies to adopt reasonable procedures for meeting the needs of
commerce for consumer credit in a manner which is fair and
equitable to the consumer. This Act does not establish identity
theft as a crime punishable as either a misdemeanor or a felony.
Support : Supporters of this bill argue that the problem of
"identity theft" is growing due to the claim that stealing a
person's identity is "easy" because a defrauder must obtain only a
consumer's first or last name and a Social Security number before
completing a fraudulent credit application. Further, they argue
that the California Consumer Credit Reporting Agencies Act is
ineffective in addressing the problem mainly because this law (1)
relies on antiquated technologies for matching consumer
identification, and (2) permits prevailing defendants to obtain
attorney's fees.
Opposition : The opponents of this bill argue that its new
requirements for items of information for a consumer's identity
will cause delay and increased costs to the credit approval
process. Also, they argue that this bill is in conflict with the
Federal Consumer Credit Reporting Reform Act of 1996 which
includes a specific process for resolving disputes regarding
credit report information.
Note : The Federal Consumer Credit Reporting Reform Act of 1996
provides that "any consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis shall implement
an automated system through which furnishers of information to
that consumer reporting agency may report the results of a
reinvestigation that finds incomplete or inaccurate information in
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a consumer's file to other such consumer reporting agencies."
This provision of the Federal Act does not appear to conflict with
the requirements of AB 156, especially pursuant to the April 16
amendments to the bill which remove the requirement that paper
documentation on reinvestigations and disputed information be sent
to credit reporting agencies within a 30-day period.
REGISTERED SUPPORT / OPPOSITION :
Support
Center for Law in the Public Interest (Sponsor)
City of Los Angeles
Consumer's Union
Los Angeles District Attorney's Office (Sponsor)
Congress of California Seniors
California District Attorney's Association
CALPIRG
Opposition
Associated Credit Bureaus
California Retailers Association
Trans Union
Neutral, if amended :
California Financial Services Association
Department of Consumer Affairs
Analysis prepared by : Meg Svoboda / abf / (916) 324-7317