BILL ANALYSIS
AB 2698
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Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
AB 2698 (Block) - As Introduced: February 19, 2010
SUBJECT : Foster youth: identity theft
SUMMARY : Adds clarifying and technical amendments to existing
requirements for county welfare departments to request consumer
credit disclosures on behalf of youth in foster care at 16 years
of age in order to detect and correct potential identity theft.
Specifically, this bill :
1)Allows the State Department of Social Services (DSS) to
request consumer disclosures (credit reports) on behalf of a
foster youth in an effort to determine whether identity theft
may have occurred.
2)Clarifies that the foster youth's credit report shall be
requested in the year that the youth reaches his or her 16th
birthday from the three national credit reporting agencies.
3)Provides county welfare departments and DSS with the authority
to make a request on behalf of a foster youth, notwithstanding
any other provision of law.
4)Removes references to an "approved counseling organization"
and clarifies that, should the credit report show evidence of
possible identity theft, the state or the county shall refer
the matter to a government agency or nonprofit organization
that provides information or assistance to victims of identity
theft.
5)Authorizes the government agency or nonprofit organization
receiving the referral to take steps to clear the foster
youth's credit report, and report back to the county or state
department on the actions taken on the foster youth's behalf.
6)Requires the Office of Privacy Protection, in consultation
with DSS, the California Welfare Directors Association, credit
reporting agencies, and other stakeholders, compile a list of
agencies and organizations to respond to potential instances
of identity theft.
AB 2698
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EXISTING LAW
1)Requires, when a youth in foster care reaches his or her 16th
birthday, the county welfare department shall request a free
annual credit report on behalf of the youth to determine
whether identity theft has occurred. Welfare and Institutions
Code (WIC) 10618.6.
2)Requires the county welfare department to refer the youth to
an approved counseling organization providing services to
victims of identity theft if the credit report shows negative
items, or evidence of identity theft. WIC 10618.6.
3)Directs DSS, in consultation with the County Welfare Directors
Association (CWDA) and consumer credit reporting agencies, to
develop a list of approved organizations that may provide
assistance to foster youth who may be victims of identity
theft. WIC 10618.6.
4)Clarifies that county welfare departments fulfill the
requirements of the law by requesting one credit report on
behalf of the foster youth, and by referring the foster youth
to an approved organization.
5)Makes it a crime for a person to willfully obtain personal
identifying information, such as a person's social security
number, identification number, name, address, etc., for any
unlawful purpose, including obtaining credit, without the
person's consent. Penal Code Section 530.5.
FISCAL EFFECT : Unknown
COMMENTS :
Need for this bill : Identity theft can derail a foster youth's
ability to successfully transition to adulthood before it has
begun, as it can create costly and time-consuming barriers to
applying for jobs or housing, and opening a bank account or
applying for credit. The scope of the problem is unknown, but
foster youth who often move from one placement to another, with
sensitive personal information often changing hands, are
considered particularly vulnerable.
The Legislature sought to address this issue with the passage of
AB 2985 (Maze), Chapter 387, Statutes of 2006. AB 2985 put in
AB 2698
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place the existing requirements for county welfare departments
to request an annual free credit report when a foster youth
turns 16, and to provide foster youth with referrals to
nonprofit organizations providing assistance for identity theft.
According to the author, this bill is intended to strengthen
and clean up provisions AB 2985.
Background : Minors rarely have credit histories as they are not
allowed to apply for and open credit accounts of their own. In
some cases, parents or guardians may provide access to credit by
including the minor as a joint account holder on the parent's
account, or by listing the minor as an authorized user on one of
the parent's accounts. Absent these scenarios, minors should
not have access to credit, and as such, for the most part, do
not have a credit history prior to 18 years of age.
Unfortunately, young people overall and foster youth in
particular, are especially vulnerable to identity theft.
Establishing credit under a minor's identity in cases of
identity theft often involves using some pieces, but not all, of
the minor's personal information, making it difficult for credit
reporting agencies to properly match the minor to potentially
fraudulent accounts. It is often not until the minor "ages out"
of foster care, and applies for credit or an apartment, that the
identity theft is discovered. When a parent or guardian
suspects their child's identity has been stolen, the parent or
guardian may request a credit report on the minor's behalf, in
writing. However, when a child or young person is removed from
their home, the state assumes the roles and responsibilities of
the parent, including the responsibility to protect a youth's
creditworthiness. At any given time, there are an estimated
5,000 16-year-old foster youth in California.
Arguments in support : The County of Los Angeles states, "AB
2698 would strengthen procedures for requesting credit reports
and handling suspected identity theft. The County's Department
of Children and Family Services indicates that counties face
many challenges when attempting to obtain credit report
clearances for minor dependents. AB 2698 would improve existing
foster youth identity theft laws, and it will help to protect
nearly 5,600 foster youth, ages 16 and over, in Los Angeles
County who may be victims of identity theft."
CWDA writes in support of this bill:
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Specifically, this bill clarifies that the county is
to refer the youth to a governmental or nonprofit
organization that provides information and assistance
with identity theft and other credit problems, rather
than an approved credit counseling agency. The bill
further authorizes that entity to take remedial action
on behalf of the foster youth to clear his or her
credit record and to report the results of the action
to the referring county or state department.
The bill additionally tasks the state Office of
Information Security and Privacy Protection with
developing a list of governmental and non-profit
groups where a youth could seek assistance, in
consultation with the California Department of Social
Services and CWDA. Note that the Office of Privacy
Protection already has developed such a list, so this
merely resolves a potential conflict with existing
law.
Suggested amendment : Since the three national credit reporting
agencies providing annual credit reports are private, for-profit
entities, the number of the credit reporting agencies may at
some point change. For clarity, the author may wish to require
a credit report from each of the national credit reporting
agencies pursuant to the free annual disclosure provision of the
federal Fair Credit Reporting Act on behalf of the foster youth.
Currently, the free annual disclosure allows for a free report
from each of the national credit reporting agencies.
Prior and related legislation:
This bill is substantially similar to AB 1324 (Bass) of 2009,
vetoed by Governor Schwarzenegger with the following message:
I signed a measure in 2006 to protect foster youth
from identity theft that has not yet been fully
implemented because of the state's fiscal challenges.
This funding was appropriated in 2008 and when fully
implemented, existing law will help foster youth that
have been the victims of identity theft. Since the
current program is still not fully operational, I
believe this measure is premature and may have the
unintended consequence of shifting county workload to
the state.
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If, through the implementation, it becomes clear that
foster youth are not being served in the way the law
intended, I would be willing to reconsider this
matter.
AB 2985 (Maze) Chapter 387, Statutes of 2006 enacted existing
requirements for county welfare departments to request a credit
report for foster youth, upon turning 16 years of age, and to
refer foster youth to an approved organization that provides
counseling services to victims of identity theft if identity
theft was suspected or discovered.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Alliance of Child and family Services
California State PTA
County Welfare Directors Association of California (CWDA)
Los Angeles County Board of Supervisors
Opposition
None on file.
Analysis Prepared by : Michelle Doty Cabrera / HUM. S. / (916)
319-2089