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First Substitute S.B. 39

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Thu, Feb 10, 2005 at 3:59 PM by rday. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Fri, Feb 11, 2005 at 11:58 AM by rday. -->

Senator Carlene M. Walker proposes the following substitute bill:


             1     
CONSUMER CREDIT PROTECTION

             2     
2005 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Carlene M. Walker

             5     

             6      LONG TITLE
             7      General Description:
             8          This bill allows a consumer to place a security freeze on the consumer's credit report.
             9      Highlighted Provisions:
             10          This bill:
             11          .    enacts the Consumer Credit Protection Act;
             12          .    defines terms;
             13          .    allows a consumer to place a security freeze on the consumer's credit report;
             14          .    provides the method by which a consumer may:
             15              .    place a security freeze on the consumer's credit report;
             16              .    remove, permanently or temporarily, a security freeze; or
             17              .    authorize release of the consumer's credit report to a specific person;
             18          .    prohibits a consumer reporting agency from furnishing a consumer's credit report if
             19      the credit report is subject to a security freeze;
             20          .    provides exceptions to the prohibition on a consumer reporting agency's furnishing
             21      of a credit report subject to a security freeze;
             22          .    provides deadlines for a consumer reporting agency's response to a consumer's
             23      request for a security freeze;
             24          .    requires a consumer reporting agency to make certain notifications to the consumer;
             25          .    allows a consumer reporting agency to charge a reasonable fee for services related




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             26
     to the placement and removal of a security freeze;
             27          .    provides exemptions for certain uses of credit reports; and
             28          .    allows a civil action by a consumer damaged by a consumer reporting agency's
             29      noncompliance with the provisions of the Consumer Credit Protection Act.
             30      Monies Appropriated in this Bill:
             31          None
             32      Other Special Clauses:
             33          This bill takes effect on S. [ July ] May .S 1, 2006.
             34      Utah Code Sections Affected:
             35      ENACTS:
             36          13-41-101, Utah Code Annotated 1953
             37          13-41-102, Utah Code Annotated 1953
             38          13-41-201, Utah Code Annotated 1953
             39          13-41-202, Utah Code Annotated 1953
             40          13-41-203, Utah Code Annotated 1953
             41          13-41-204, Utah Code Annotated 1953
             42     

             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 13-41-101 is enacted to read:
             45     
CHAPTER 41. CONSUMER CREDIT PROTECTION ACT

             46     
Part 1. General Provisions

             47          13-41-101. Title.
             48          This chapter is known as the "Consumer Credit Protection Act."
             49          Section 2. Section 13-41-102 is enacted to read:
             50          13-41-102. Definitions.
             51          As used in this chapter:
             52          (1) "Consumer" means a natural person residing in this state.
             53          (2) "Consumer reporting agency" means a person that, for a monetary fee, dues, or on a
             54      cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling
             55      or evaluating consumer credit information or other information about a consumer for the
             56      purpose of furnishing a credit report to a third person.




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         (3) "Credit report" means a consumer report as defined in 15 U.S.C. Sec. 1681a ,
             58      except that "credit report" does not include :
             59          (a) a motor vehicle record obtained from a state or an agency of a state; or
             60          (b) any information regarding an applicant's or insured's insurance claim history.
             61          (4) S. a .S "Proper identification" means S. [ a form of positive identification issued by a
             62      governmental entity that:
             63          (a) contains:
             64          (i) a numerical identifier; and
             65          (ii) a photograph of the person identified; and
             66          (b) may include:
             67          (i) a state identification card;
             68          (ii) a state driver license;
             69          (iii) a United States military identification card; or
             70          (iv) a United States passport.
] that information that is generally deemed sufficient to

             70a      identify a person.
             70b          (b) "Proper identification" may not be interpreted by a consumer reporting agency to
             70c      include additional information about a consumer's employment, personal, or family history
             70d      unless the information described in Subsection (4)(a) does not reasonably identify the
             70e      consumer. .S
             71          (5) "Security freeze" means a prohibition, meeting the requirements of Section
             72      13-41-201 , on a consumer reporting agency's furnishing of a consumer's credit report.
             73          Section 3. Section 13-41-201 is enacted to read:
             74     
Part 2. Security Freeze

             75          13-41-201. Consumer reports -- Security freeze.
             76          (1) Except as provided in Subsection (3), a consumer may request that a security freeze
             77      be placed on that consumer's credit report if the consumer:
             78          (a) requests that the consumer reporting agency place a security freeze on the
             79      consumer's credit report:
             80          (i) in writing by certified mail; or
             81          (ii) by other reliable means S. that may be developed .S using telephone, fax, the
             81a      Internet, or other electronic media;
             82          (b) pays a reasonable fee to the consumer reporting agency for placing a security
             83      freeze; and
             84          (c) provides proper identification to the consumer reporting agency.
             85          (2) (a) Except as provided in Subsection (3), a consumer reporting agency may not
             86      furnish a credit report to any person if the consumer who is the subject of the credit report
             87      requests a security freeze be placed on the credit report under Subsection (1).




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         (b) A consumer reporting agency shall comply with a consumer's request under
             89      Subsection (1) within three business days after the day on which the request is received.
             90          (c) Within ten business days of the day on which the consumer reporting agency places
             91      a security freeze on the consumer's credit report, a consumer reporting agency shall send to the
             92      consumer:
             93          (i) written confirmation of the consumer's request under Subsection (1); and
             94          (ii) information explaining how the consumer may:
             95          (A) remove the security freeze under Subsection (4)(a)(i);
             96          (B) temporarily remove the security freeze under Subsection (4)(a)(ii); and
             97          (C) authorize a consumer reporting agency to furnish the consumer's credit report to a
             98      specific person under Subsection (4)(a)(iii).
             99          (d) Notwithstanding Subsection (1), in response to a request for a consumer's credit
             100      report that is subject to a security freeze, the consumer reporting agency may inform the
             101      requestor that the consumer's credit report is subject to a security freeze.
             101a      S. (e) A consumer reporting agency may remove, temporarily or permanently, a security
             101b      freeze from a consumer's credit report only in the following cases:
             101c          (i) upon request by the consumer under Subsection (4); or
             101d          (ii) if the security freeze is placed on the consumer's credit report based on a material
             101e      misrepresentation of fact by the consumer.
             101f          (f) (i) A material misrepresentation of fact under Subsection (2)(e)(ii) is a
             101g      misrepresentation that the consumer makes in a request for a credit freeze in an attempt to
             101h      defraud the consumer reporting agency.
             101i          (ii) Before a consumer reporting agency may remove a security freeze from a
             101j      consumer's credit report under Subsection (2)(e)(ii), the consumer reporting agency shall
             101k      notify the consumer in writing that the security freeze will be removed. .S
             102          (3) Notwithstanding Subsections (1) and (2), a consumer reporting agency may furnish
             103      a credit report if the credit report:
             104          (a) is furnished to a person with whom the consumer who is the subject of the credit
             105      report has a debtor-creditor relationship, or to that person's subsidiary, affiliate, agent, or
             106      prospective assignee, for the purpose of:
             107          (i) reviewing an account, including for:
             108          (A) account maintenance;
             109          (B) account monitoring; or
             110          (C) a credit-line increase; S. or .S
             111          (ii) collecting a financial obligation owing; S. [ or
             112          (iii) extending credit to the consumer;
] .S


             113          (b) is requested by the consumer who is the subject of the report;


            
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         (c) is furnished to a subsidiary, affiliate, agent, assignee, or prospective assignee of a
             115      person receiving a consumer's credit report under Section (4)(a)(iii);
             116          (d) is furnished pursuant to a court order;
             117          (e) is furnished to a federal, state, or local governmental entity, including a law
             118      enforcement agency;



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             119
         (f) is furnished to any authorized person for the purpose of investigating or collecting:
             120          (i) delinquent taxes;
             121          (ii) an unpaid judgment;
             122          (iii) an unpaid assessment under:
             123          (A) Title 11, Chapter 27, Utah Refunding Bond Act;
             124          (B) Title 17A, Special Districts; or
             125          (C) Title 54, Chapter 8, Utah Underground Conversion of Utilities Law; or
             126          (iv) unpaid interest or penalties;
             127          (g) is furnished to any person for prescreening under 15 U.S.C. Sec. 1681b(c);
             128          (h) is furnished to a credit monitoring service to which the consumer subscribes;
             129          (i) is furnished during a period in which the consumer has temporarily removed the
             130      security freeze; or
             131          (j) is furnished to a person specifically authorized to receive the credit report under
             132      Subsection (4)(a)(iii).
             133          (4) (a) Subject to the requirements of Subsection (4)(b), a consumer may:
             134          (i) remove the security freeze on that consumer's credit report by requesting that the
             135      consumer reporting agency remove the security freeze;
             136          (ii) temporarily remove the security freeze on that consumer's credit report by:
             137          (A) requesting that the consumer reporting agency remove the security freeze for a
             138      specific period of time; and
             139          (B) paying the fee allowed by Subsection (5); or
             140          (iii) authorize a consumer reporting agency to furnish the consumer's credit report to a
             141      specific person by:
             142          (A) requesting that the consumer reporting agency furnish the credit report to a specific
             143      person if that person request the credit report; and
             144          (B) paying the fee allowed by Subsection (5).
             145          (b) Any request or authorization under Subsection (4)(a)(i), (ii), or (iii) shall be made
             146      in writing by certified mail with proper identification accompanied by a personal identification
             147      number provided to the consumer by the consumer reporting agency.
             148          (c) A consumer reporting agency shall process a request or authorization under
             149      Subsection (4)(a)(i), (ii), or (iii) within three business days of the day on which the consumer



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             150
     reporting agency receives the request.
             151          (5) A consumer reporting agency may charge a consumer a reasonable fee to:
             152          (a) furnish a credit report under Subsection (3)(b), except as provided for in any other
             153      provision of law;
             154          (b) temporarily remove a security freeze under Subsection (4)(a)(ii);
             155          (c) allow the consumer to authorize the release of the consumer's credit report to a
             156      specific individual or entity under Subsection (4)(a)(iii); or
             157          (d) allow a consumer to place a security freeze under Subsection (1), except that a
             158      consumer reporting agency may not charge a fee for placing a security freeze if the person on
             159      whose credit report the security freeze is to be placed provides the consumer reporting agency
             160      with a copy of a police report indicating that the person is a victim of identity fraud.
             161          Section 4. Section 13-41-202 is enacted to read:
             162          13-41-202. Exemptions.
             163          This chapter does not apply to:
             164          (1) (a) except as provided in Subsection (1)(b), a consumer reporting agency that acts
             165      only as a reseller of credit information that:
             166          (i) assembles and merges information contained in the database of another consumer
             167      reporting agency; and
             168          (ii) does not maintain a permanent database of credit information from which new
             169      consumer credit reports are produced
             170          (b) a consumer reporting agency that acts only as a reseller of credit information shall
             171      honor a security freeze placed on a consumer credit report by another consumer reporting
             172      agency;
             173          (2) a check service company that issues authorization for the purpose of approving or
             174      processing negotiable instruments, electronic funds transfers, or similar methods of payment;
             175          (3) a fraud prevention service company that issues reports concerning incidents of
             176      fraud;
             177          (4) A deposit account information service company that issues reports to inquiring
             178      banks or other financial institutions for use in reviewing a consumer's request for a demand
             179      deposit account at the inquiring bank or financial institution containing information concerning
             180      the requesting consumer's:



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             181
         (a) account closures based on fraud;
             182          (b) substantial overdrafts;
             183          (c) abuse of automatic teller machines; or
             184          (d) other similar negative information;
             185          (5) a person administering a credit file monitoring subscription service to which the
             186      consumer subscribes; or
             187          (6) a person requesting the consumer's credit report for use by an insurance business to
             188      set a rate or underwrite for insurance purposes, as those terms are defined in Section
             189      31A-1-301 .
             190          Section 5. Section 13-41-203 is enacted to read:
             191          13-41-203. Effect of security freeze on third-party.
             192          If a person who requests a consumer's credit report in connection with an application
             193      for credit or other purpose is notified that a security freeze is in place on that credit report, the
             194      requesting person may treat the consumer's application as incomplete.
             195          Section 6. Section 13-41-204 is enacted to read:
             196          13-41-204. Violation of security freeze -- Action by consumer.
             197          If a consumer reporting agency violates Section 13-41-201 , a consumer may bring a
             198      civil action to recover actual damages sustained by the consumer because of the violation.
             199          Section 7. Effective date.
             200          This bill takes effect on S. [ July ] May .S 1, 2006.


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