BILL ANALYSIS �
AB 1658
Page A
ASSEMBLY THIRD READING
AB 1658 (Jones-Sawyer, et al.)
As Amended May 23, 2014
Majority vote
HUMAN SERVICES 7-0 BANKING & FINANCE 11-0
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|Ayes:|Stone, Maienschein, |Ayes:|Dickinson, Allen, |
| |Ammiano, | |Achadjian, Bonta, Chau, |
| |Ian Calderon, Garcia, | |Gatto, Linder, Perea, |
| |Grove, Hall | |Rodriguez, Weber, |
| | | |Williams |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Gatto, Bigelow, | | |
| |Bocanegra, Bradford, Ian | | |
| |Calderon, Campos, | | |
| |Donnelly, Eggman, Gomez, | | |
| |Holden, Jones, Linder, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Wagner, | | |
| |Weber | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires a county child welfare agency (CWA) to
undertake a number of actions in regards to a child's consumer
credit record when the child is placed into foster care.
Specifically, this bill :
1)Requires a county CWA to notify the three major credit
reporting agencies (CRA) when a child between the ages of ten
and 15 is placed into foster care.
2)Requires a CRA to notify the county CWA if the child has an
active consumer credit report.
3)Commencing July 1, 2015, requires the county CWA to request
the three major CRAs to place a security freeze on the child's
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consumer credit report if the child is found to have an active
consumer credit report.
4)Commencing July 1, 2015, if the child does not have an active
consumer credit report, requires the CRA, upon request of the
county CWA, to prohibit the child's information from used to
create a consumer credit account.
5)If the child is found to have an active consumer credit
report, requires the county CWA to work with the Department of
Justice's Privacy Enforcement and Protection Unit to resolve
any credit irregularities or negative actions on the report.
6)Permits a child in foster care over the age of 16 to decline
having a security freeze placed on his or her consumer credit
report.
7)Requires a county CWA to ensure that a nonminor dependent who
is found to have an active consumer credit report receives
assistance with the placement of a freeze on his or her
report.
8)Requires the Department of Social Services (DSS), in
consultation with specified entities, to develop an all-county
letter that does the following:
a) Provide the circumstances under which a freeze of a
foster child's credit report is lifted, including when the
child exits, emancipates, or runs away from foster care,
and by whom the freeze can be lifted.
b) Provide instruction as to how a county CWA shall notify
the three major CRAs that a foster child can reacquire the
ability to develop credit.
c) Identify required processes and best practices in the
identification and resolution of credit irregularities or
negative actions on a foster child's credit report,
including, but not limited to, entering the information
into the foster child's case plan and notification of the
juvenile court, child's counsel, and other adults
responsible for the child's care, as necessary.
FISCAL EFFECT : According to the Assembly Appropriations
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Committee:
On-going administrative costs to DSS in the range $750,000
(General Fund) to handle cases. (Case load affected is
approximately 10,000 in 2014-15. DSS indicates it takes social
workers about one hour to check/freeze an account.)
On-going costs to DSS in the range of $50,000 associated with
unfreezing credit accounts ($30 per child fee plus social worker
time, assuming approximately 5% are frozen).
COMMENTS :
Foster youth and identity theft: Identity theft is a growing
crime that is typically not discovered until after the person
whose identity is stolen discovers that fraudulent or criminal
activity has been conducted in using their name and personal and
financial information. Identity theft is more common among
children and even more common among children in foster care. A
2011 study conducted by Carnegie Mellon University found that
children are far more likely to be targeted for identity theft
for their unused social security numbers. Specifically, the
report found that of 42,232 children polled, over 10%, or 4,311
of them, were found to have had their identity stolen. When
compared to the rate of identity theft among adults, children in
this study were 51% more likely to experience identity theft.<1>
Further exacerbating this finding is the fact that parents and
children often do not find out the youth is a victim of identity
theft until he or she applies for a job, opens a financial
account, or is notified by law enforcement that his or her
personal information has been stolen.
However, children in foster care who rely upon the state's child
welfare system (CWS) to provide for their health and safety are
at an even greater risk than their peers to become victims of
identity theft. In 2011, the California Office of Privacy
Protection, now known as the Department of Justice's Privacy
Enforcement and Protection Unit, released a report of a
year-long pilot project in Los Angeles County. The pilot
project conducted credit checks on 2,110 foster youth between
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<1> Child Identity Theft: New Evidence Indicates Identity
Thieves are Targeting Children for Unused Social Security
Numbers. Richard Power, Distinguished Fellow; Carnegie Mellon
CyLab. April 2011.
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the ages of 16 and 17 years of age. It was discovered that 104
children were found to have had 247 financial accounts of
varying types; credit cards, bank accounts, utility accounts,
cellular phone and cable contracts, etc., opened in their name.
Several children were found to have auto loans and one was
identified as having a $217,000 mortgage listed in the child's
name. Fortunately, the project also worked to resolve all 247
accounts and cleared the credit of all 104 children who
participated in the pilot.
Providing foster youth access to their consumer credit reports:
In California, the state has adopted several legislative
measures to help address the risks of identity theft among
children in foster care. In 2006, the state adopted AB 2985
(Maze), Chapter 387, Statutes of 2006, which required CWAs to
obtain the consumer credit report for a youth in foster care
when he or she turns 16 years of age. It also required a CWA to
provide assistance to a foster youth if his or her credit report
was found to have any inaccuracies or negative findings. It was
later amended by AB 106 (Committee on Budget), Chapter 32,
Statutes of 2011, the human services budget trailer bill, which
clarified that, beginning July 1, 2013 CWAs were required to
request rather than obtain a foster youth's credit report when
he or she turns 16 years of age. However, soon after AB 106 was
signed into law, it was preempted by the federal Child and
Family Services Improvement and Innovation (CFSII) Act of 2011.
The CFSII Act requires CWAs to annually request a consumer
credit report for a youth 16 years of age and older who is in
foster care. Most recently, SB 521 (Liu), Chapter 847, Statutes
of 2012, was adopted by the state to bring California statute
into compliance with the CFSII Act.
In implementation of this requirement, DSS issued All County
Letter (ACL) Number 14-23, which describes the process by which
CWAs may request a foster youth's credit report and how they can
provide assistance in resolving any negative findings in the
report. Specifically, DSS has reached an agreement with the
three major CRAs, Equifax, Experian, and TransUnion, to create
an electronic batch process for CWAs to access the credit
records of foster youth. However, as of the issuance of the ACL
dated February 28, 2014, five counties have not opted into
accessing foster youth credit records through this process. In
the case of counties that do not receive a batch file, they are
required to comply with separate request procedures imposed by
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each of the three major CRAs. In the case of Equifax and
TransUnion, CWAs are required to open an electronic account and
pay a $500 fee. For Experian, CWAs must submit a formal letter
requesting the report, which must include a copy of the court's
dependency order with sensitive information redacted.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089
FN: 0003821