BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 2374
Author: Roger Hernández (D)
Amended: 6/18/12 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 7/3/12
AYES: Evans, Corbett, Leno
NOES: Harman, Blakeslee
ASSEMBLY FLOOR : 47-21, 5/25/12 - See last page for vote
SUBJECT : Consumer credit reports: security freezes
SOURCE : Author
DIGEST : This bill prohibits a credit reporting agency
from charging specified consumers any fee for the initial
placement of a security freeze. A credit reporting agency
could, however, still charge a fee (capped at $5) for
lifting, removing, or replacing a security freeze.
ANALYSIS : Existing law permits a consumer to place a
"security freeze" on his or her credit report, prohibiting
consumer credit reporting agencies from releasing the
consumer's credit report or any information contained in it
unless the consumer expressly authorizes the release.
(Civil Code (CIV) Sec. 1785.11.2(a))
Existing law requires a credit reporting agency to place a
security freeze on a consumer's credit report within three
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business days after receiving the consumer's request. (CIV
Sec. 1785.11.2(b))
Existing law requires a credit reporting agency to send a
written confirmation of the security freeze to the consumer
within 10 business days. The credit reporting agency must
also provide the consumer with a unique personal
identification number or password to be used by the
consumer when he or she authorizes the release of his or
her information for a specific party or period of time.
(CIV Sec. 1785.11.2(c))
Existing law permits a consumer to allow his or her credit
report to be accessed for a specific party or period of
time while a freeze is in place and requires the consumer
to provide specified information to the credit reporting
agency so that the freeze may be temporarily lifted. (CIV
Code Sec. 1785.11.2(d))
Existing law requires a credit reporting agency that
receives a consumer's request to temporarily lift a freeze
to comply with that request within three business days.
(CIV Sec. 1785.11.2(e))
Existing law provides that a credit reporting agency may
remove or temporarily lift a freeze only upon the
consumer's request or if the consumer's credit report was
frozen due to a material misrepresentation of fact by the
consumer, in which case the credit reporting agency must
notify the consumer before removing the freeze. (CIV Sec.
1785.11.2(g))
Existing law requires that a security freeze must remain in
place until the consumer requests that it be removed. If a
consumer requests that the freeze be removed, a credit
reporting agency must comply with that request within three
business days of receiving the request for removal, and the
consumer must provide specified information. (CIV Sec.
1785.11.2(j)) Existing law provides that a credit
reporting agency must require proper identification, as
defined, of a consumer making a request to place or remove
a security freeze. (CIV Sec. 1785.11.2(k))
Existing law permits a credit reporting agency to charge a
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fee of no more than $10 for placing, removing, or
temporarily lifting a freeze. A credit reporting agency
may not charge a fee to an identity theft victim, and may
charge a fee of no more than $5 to a consumer who is 65
years of age and older. (CIV Sec. 1785.11.2(m))
This bill prohibits a credit reporting agency from charging
a consumer 65 years of age or older any fee for the initial
placement of the freeze. A credit reporting agency could
charge a fee (capped at $5) for lifting, removing, or
replacing a security freeze.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/6/12)
California Senior Legislature
Consumers Union
Older Women's League of California
Privacy Rights Clearinghouse
ARGUMENTS IN SUPPORT : According to the author:
The purpose of the bill is to protect seniors from
identity theft by prohibiting a consumer credit
reporting agency from charging a person who is 65
years of age or older an initial fee for placing a
security freeze on his or her credit report. The bill
would allow senior consumers to put an initial
security freeze on their credit at no cost to prevent
identity thieves from opening new credit accounts in
their names. A security freeze enables a consumer to
prevent anyone from looking at his or her own credit
reporting file for purposes of granting credit unless
the consumer chooses to let that particular business
look at the information. This gives consumers control
over who has access to their information needed to
process a credit application and effectively prevents
others from opening new accounts in their name. ?
Identity thieves target seniors as they are less
likely to monitor their credit files and are also less
likely to detect if a fraudulent account has been
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opened in their name. This is because seniors do not
typically open new credit accounts and therefore have
little need to check their credit reports.
The California Senior Legislature writes in support of the
measure, "Ýs]enior citizens are a vulnerable group with
limited income. This proposed legislation will lessen the
impact on this population should they have the unfortunate
circumstance of having to place a security freeze on their
credit report."
The Older Women's League of California states:
We believe in making it easy for older consumers to
"freeze" or lock access to their credit file against
anyone trying to open up a new account or to get new
credit in their name. Older people are more
susceptible to new account identity theft, but often
do not report it because they are ashamed for being a
"victim." At the same time, older people are less
likely to monitor their credit files as closely as
younger people who are in the process of establishing
their creditworthiness. In fact, older women are more
likely to be living off modest Social Security
benefits and struggling to cover costs of daily living
on fixed incomes. Even though the current fee of
$5.00 seems small, it adds up when combined with other
financial issues.
ASSEMBLY FLOOR : 47-21, 5/25/12
AYES: Alejo, Allen, Ammiano, Beall, Block, Blumenfield,
Bonilla, Bradford, Brownley, Buchanan, Butler, Charles
Calderon, Campos, Carter, Cedillo, Chesbro, Davis,
Dickinson, Eng, Feuer, Fong, Furutani, Galgiani, Gatto,
Gordon, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Lara, Bonnie Lowenthal, Mendoza,
Mitchell, Monning, Pan, V. Manuel Pérez, Portantino,
Skinner, Solorio, Swanson, Torres, Wieckowski, Yamada,
John A. Pérez
NOES: Achadjian, Conway, Donnelly, Beth Gaines, Garrick,
Gorell, Hagman, Halderman, Harkey, Jones, Logue, Mansoor,
Miller, Morrell, Nestande, Nielsen, Norby, Olsen, Smyth,
Valadao, Wagner
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NO VOTE RECORDED: Atkins, Bill Berryhill, Cook, Fletcher,
Fuentes, Grove, Hall, Knight, Ma, Perea, Silva, Williams
RJG:n 7/6/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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