REPORT TITLE:
Consumer Credit Reporting


DESCRIPTION:
Adds a new chapter to the HRS which regulates consumer credit
reporting.  Adds two new sections to the HRS, one which requires
creditors to notify applicants of any action taken on the
application for credit, and the other which make identity theft a
crime.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           201
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO CONSUMER CREDIT REPORTING. 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  A process has been developed for investigating
 
 2 and evaluating the credit worthiness, credit standing, credit
 
 3 capacity, and general reputation of consumers.  Consumer credit
 
 4 reporting agencies have assumed a vital role in assembling and
 
 5 evaluating consumer credit and other information on consumers.
 
 6 The legislature believes there is a need to ensure that consumer
 
 7 credit reporting agencies act with fairness, impartiality, and a
 
 8 respect for the consumer's right to privacy, and to prevent
 
 9 identity theft.  
 
10      The purpose of this Act is to require that consumer credit
 
11 reporting agencies adopt reasonable procedures for dispensing
 
12 consumer credit information in a manner that is fair and
 
13 equitable to the consumer, with regard to the confidentiality,
 
14 accuracy, relevancy, and proper utilization of the information in
 
15 accordance with the requirements of this Act.  The legislature
 
16 notes that this Act is based on legislation that has been enacted
 
17 in California.  Thus, persons affected by this Act should easily
 
18 meet its requirements.
 
19      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 

 
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 1 a new chapter to be appropriately designated and to read as
 
 2 follows:
 
 3                             "CHAPTER
 
 4                     CONSUMER CREDIT REPORTING
 
 5           -1  Definitions.  As used in this chapter:
 
 6      "Adverse action" means a denial or revocation of credit, a
 
 7 change in the terms of an existing credit arrangement which is
 
 8 adverse to the interests of the consumer, or a refusal to grant
 
 9 credit in substantially the amount or on substantially the terms
 
10 requested.  "Adverse action" includes:
 
11      (1)  Any denial of, increase in any charge for, or reduction
 
12           in the amount of, insurance for personal, family, or
 
13           household purposes made in connection with the
 
14           underwriting of insurance;
 
15      (2)  Any denial of employment or any other decision made for
 
16           employment purposes which adversely affects any current
 
17           or prospective employee; or
 
18      (3)  Any action taken, or determination made, that is
 
19           adverse to the interests of the consumer, for an
 
20           application for an extension of credit, or an
 
21           application for the rental of a dwelling unit.
 
22      "Adverse action" does not include:
 
23      (1)  A refusal to extend additional credit to a consumer
 

 
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 1           under an existing credit arrangement if:
 
 2           (A)  The consumer is delinquent or otherwise in default
 
 3                under a credit arrangement; or
 
 4           (B)  The additional credit would exceed a credit limit
 
 5                previously established for the consumer; or
 
 6      (2)  A refusal or failure to authorize an account
 
 7           transaction at a point of sale.
 
 8      "Consumer" means a natural individual.
 
 9      "Consumer credit report" means any written, oral, or other
 
10 communication of any information by a consumer credit reporting
 
11 agency bearing on a consumer's credit worthiness, credit
 
12 standing, or credit capacity, which is used or is expected to be
 
13 used, or collected in whole or in part, for the purpose of
 
14 serving as a factor in establishing the consumer's eligibility
 
15 for:
 
16      (1)  Credit to be used primarily for personal, family, or
 
17           household purposes;
 
18      (2)  Employment purposes;
 
19      (3)  Rental of a dwelling unit; or
 
20      (4)  Other purposes authorized in section      -4.
 
21      "Consumer credit report" does not include:
 
22      (1)  Any report containing information solely for
 
23           transactions or experiences between the consumer and
 

 
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 1           the person making the report;
 
 2      (2)  Any communication of information from paragraph (1) or
 
 3           from the consumer's credit application that is
 
 4           communicated to a person within the credit reporting
 
 5           organization, or that is made to an entity owned by, or
 
 6           affiliated by corporate control with, the person making
 
 7           the report; provided that the consumer is informed by
 
 8           means of a clear and conspicuous written disclosure
 
 9           that information contained in the credit application
 
10           may be provided to these persons.  However, where a
 
11           credit application is taken by telephone, disclosure
 
12           shall initially be given orally at the time the
 
13           application is taken, and a clear and conspicuous
 
14           written disclosure shall be made to the consumer in the
 
15           first written communication to that consumer after the
 
16           application is taken;
 
17      (3)  Any authorization or approval of a specific extension
 
18           of credit directly or indirectly by the issuer of a
 
19           credit card or similar device;
 
20      (4)  Any report by a person conveying a decision whether to
 
21           make a specific extension of credit directly or
 
22           indirectly to a consumer in response to a request by a
 
23           third party, if the third party advises the consumer of
 

 
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 1           the name and address of the person to whom the request
 
 2           was made and the person makes the disclosures to the
 
 3           consumer required under section      -13;
 
 4      (5)  Any report containing information solely on a
 
 5           consumer's character, general reputation, personal
 
 6           characteristics, or lifestyle which is obtained through
 
 7           personal interviews with neighbors, friends, or
 
 8           associates of the consumer reported on, or others with
 
 9           whom the consumer is acquainted, or who may have
 
10           knowledge concerning those items of information;
 
11      (6)  Any communication about a consumer in connection with a
 
12           credit transaction which is not initiated by the
 
13           consumer, between persons who are affiliated by common
 
14           ownership or common corporate control, if either of
 
15           those persons has complied with section      -14(b)(2)
 
16           with respect to a prequalifying report from which the
 
17           information communicated is taken; provided that the
 
18           consumer has consented in writing to the provision and
 
19           use of the prequalifying report; or
 
20      (7)  Any consumer credit report furnished for use in
 
21           connection with a transaction which consists of an
 
22           extension of credit to be used solely for a commercial
 
23           purpose.
 

 
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 1      "Consumer credit reporting agency" or "agency" means any
 
 2 person who, for monetary fees, dues, or on a cooperative
 
 3 nonprofit basis, regularly engages in the business of assembling
 
 4 or evaluating consumer credit information or other information on
 
 5 consumers for the purpose of furnishing consumer credit reports
 
 6 to third parties, but does not include any governmental agency.
 
 7      "Credit transaction that is not initiated by the consumer"
 
 8 does not include the use of a consumer credit report by an
 
 9 assignee for collection, or by a person with which the consumer
 
10 has an account for purposes of:
 
11      (1)  Reviewing the account, which includes activities
 
12           related to account maintenance and monitoring, credit
 
13           line increases, and account upgrades and enhancements;
 
14           or
 
15      (2)  Collecting the account.
 
16      "Employment purposes", when used in connection with a
 
17 consumer credit report, means a report used for the purpose of
 
18 evaluating a consumer for employment, promotion, reassignment, or
 
19 retention as an employee.
 
20      "File", when used in connection with information on any
 
21 consumer, means all of the information on that consumer recorded
 
22 and retained by a consumer credit reporting agency, regardless of
 
23 how the information is stored.
 

 
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 1      "Firm offer of credit" means any offer of credit to a
 
 2 consumer that will be honored if, based on information in a
 
 3 consumer credit report on the consumer and other information
 
 4 bearing on the creditworthiness of the consumer, the consumer is
 
 5 determined to meet the criteria used to select the consumer for
 
 6 the offer and the consumer is able to provide any real property
 
 7 collateral specified in the offer.  For purposes of this
 
 8 definition, the phrase "other information bearing on the
 
 9 creditworthiness of the consumer" means information that the
 
10 person making the offer is permitted to consider pursuant to any
 
11 rule, regulation, or formal written policy statement adopted by
 
12 the Federal Trade Commission or any federal bank regulatory
 
13 agency relating to the federal Fair Credit reporting Act, 15
 
14 United States Code section 1681, as amended.
 
15      "Item of information" means any of one or more informative
 
16 entries in a credit report which causes a creditor to deny credit
 
17 to an applicant, increase the cost of credit to an applicant, or
 
18 deny an applicant a checking account with a bank or other
 
19 financial institution.
 
20      "Person" means any individual, partnership, corporation,
 
21 limited liability corporation, trust, estate, cooperative, or
 
22 association, or other nongovernmental entity.
 
23      "Prequalifying report" means a report containing the limited
 

 
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 1 information permitted under section      -4(b)(2).
 
 2      "State child support enforcement agency" means the child
 
 3 support enforcement agency acting pursuant to section 576D-2, to
 
 4 establish or enforce child support obligations, and any state
 
 5 agency or official that succeeds to these responsibilities under
 
 6 a successor statute.
 
 7           -2  Application of this chapter.(a)  Nothing in this
 
 8 chapter shall apply to any person registered pursuant to section
 
 9 443B-3, any state or county governmental entity, or to any
 
10 employee of that person or entity, unless that person is employed
 
11 directly by a consumer credit reporting agency.
 
12      (b)  Any person who, for monetary fees, dues, or on a
 
13 cooperative nonprofit basis, regularly engages in the practice of
 
14 assembling, evaluating, or disseminating information on the
 
15 checking account experiences of consumer customers of banks or
 
16 other financial institutions is subject to the same laws which
 
17 govern consumer credit reporting agencies.
 
18      (c)  The notices and disclosures to consumers provided for
 
19 in this chapter shall be required to be made only to those
 
20 consumers who have a mailing address in this State.
 
21           -3  Consumer's right to inspect consumer credit file.
 
22 (a)  Every consumer credit reporting agency, upon request and
 
23 proper identification of any consumer, shall allow the consumer
 

 
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 1 to visually inspect all files maintained regarding that consumer
 
 2 at the time of the request.
 
 3      (b)  Every consumer reporting agency, upon contact by a
 
 4 consumer by telephone, mail, or in person, regarding information
 
 5 which may be contained in the agency files regarding that
 
 6 consumer, shall promptly advise the consumer of the consumer's
 
 7 rights pursuant to sections      -20 and      -21, and of the
 
 8 obligation of the agency to provide disclosure of the files in
 
 9 person, by mail, or by telephone pursuant to section      -8,
 
10 including the obligation of the agency to provide a decoded
 
11 written version of the file or a written copy of the file with an
 
12 explanation of any code used, if the consumer requests a copy.
 
13 The disclosure shall be provided in the manner selected by the
 
14 consumer, chosen from among any reasonable means available to the
 
15 consumer credit reporting agency.
 
16      The consumer credit reporting agency shall determine the
 
17 applicability of section      -10(1) and, where applicable, shall
 
18 inform the consumer of the consumer's rights under that section.
 
19      (c)  All information on a consumer in the files of a
 
20 consumer credit reporting agency at the time of a request for
 
21 inspection under subsection (a), shall be available for
 
22 inspection, including the names and addresses of the sources of
 
23 information.
 

 
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 1      (d)  The consumer credit reporting agency shall also
 
 2 disclose the recipients to whom the consumer's credit report has
 
 3 been released:
 
 4      (1)  For employment purposes within the two-year period
 
 5           preceding the request; and
 
 6      (2)  For any other purpose within the six-month period
 
 7           preceding the request.
 
 8      Disclosure of recipients of consumer credit reports for
 
 9 purposes of this subsection shall include the name of the
 
10 recipient, or, if applicable, the business name under which the
 
11 recipient does business.  If requested by the consumer, the
 
12 identification shall also include the address of the recipient.
 
13      (e)  The consumer credit reporting agency shall also
 
14 disclose a record of all inquiries received by the agency in the
 
15 six-month period preceding the consumer's request that identified
 
16 the consumer in connection with a credit transaction which is not
 
17 initiated by the consumer.  This record of inquiries shall
 
18 include the name of each recipient making an inquiry.
 
19           -4  Permitted release of a consumer credit report by a
 
20 consumer credit reporting agency.  (a)  A consumer credit
 
21 reporting agency shall release a consumer credit report only
 
22 under the following circumstances:
 
23      (1)  In response to an order of a court having competent
 

 
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 1           jurisdiction;
 
 2      (2)  In accordance with the written instructions of the
 
 3           consumer to whom the credit report relates; or
 
 4      (3)  To a person whom the reporting agency has reason to
 
 5           believe:
 
 6           (A)  Intends to use the information in connection with:
 
 7                (i)  A credit transaction;
 
 8               (ii)  Entering or enforcing a support order
 
 9                     involving the consumer, which is issued by a
 
10                     court of competent jurisdiction; and
 
11              (iii)  Involving the extension of credit to, or
 
12                     review or collection of an account of, the
 
13                     consumer;
 
14           (B)  Intends to use the information for employment
 
15                purposes;
 
16           (C)  Intends to use the information for the
 
17                underwriting of insurance involving the consumer,
 
18                or for insurance claims settlements;
 
19           (D)  Intends to use the information for determining the
 
20                consumer's eligibility for a license or other
 
21                benefit granted by a governmental instrumentality
 
22                required by law to consider the applicant's
 
23                financial responsibility or status;
 

 
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 1           (E)  Intends to use the information in connection with
 
 2                the rental of a dwelling unit to the consumer; or
 
 3           (F)  Otherwise has a legitimate business need for the
 
 4                information in connection with a business
 
 5                transaction involving the consumer.
 
 6      (b)  A consumer credit reporting agency may furnish
 
 7 information for purposes of a credit transaction specified in
 
 8 subsection (a)(3)(A), where it is a credit transaction that is
 
 9 not initiated by the consumer, only under the circumstances
 
10 specified in paragraph (1) or (2), as follows:
 
11      (1)  The consumer authorizes the consumer credit reporting
 
12           agency to furnish the consumer credit report to the
 
13           person requesting the information; and
 
14      (2)  The proposed transaction involves a firm offer of
 
15           credit to the consumer, the consumer credit reporting
 
16           agency has complied with subsection (c), and the
 
17           consumer has not elected pursuant to subsection (c)(1)
 
18           to have the consumer's name excluded from lists of
 
19           names provided by the consumer credit reporting agency
 
20           for purposes of reporting in connection with the
 
21           potential issuance of firm offers of credit.  A
 
22           consumer credit reporting agency may provide only the
 
23           following information pursuant to this paragraph:
 

 
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 1           (A)  The name and address of the consumer; and
 
 2           (B)  Information pertaining to a consumer that is not
 
 3                identified or identifiable with a particular
 
 4                consumer.
 
 5      Except as provided in section      -8(a)(2), a consumer
 
 6 credit reporting agency shall not release to any person, a record
 
 7 of inquiries solely resulting from credit transactions that are
 
 8 not initiated by the consumer.
 
 9      (c)  (1)  A consumer may elect to have the consumer's name
 
10           and address excluded from any list provided by a
 
11           consumer credit reporting agency pursuant to subsection
 
12           (b)(2), by notifying the consumer credit reporting
 
13           agency by telephone or in writing, through the
 
14           notification system maintained by the consumer credit
 
15           reporting agency pursuant to subsection (d), that the
 
16           consumer does not consent to any use of consumer credit
 
17           reports relating to the consumer in connection with any
 
18           transaction that is not initiated by the consumer;
 
19      (2)  An election of a consumer under paragraph (1) shall be
 
20           effective with respect to a consumer credit reporting
 
21           agency and any affiliate of the consumer credit
 
22           reporting agency, on the date on which the consumer so
 
23           notifies the consumer credit reporting agency; and
 

 
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 1      (3)  An election of a consumer under paragraph (1) shall
 
 2           terminate following notice from the consumer to the
 
 3           consumer credit reporting agency, through the system
 
 4           established pursuant to subsection (d), that the
 
 5           election is no longer effective.
 
 6      (d)  Each consumer credit reporting agency that furnishes
 
 7 information pursuant to subsection (b) in connection with a
 
 8 credit transaction not initiated by the consumer, shall establish
 
 9 and maintain a notification system including a toll-free
 
10 telephone number, that permits any consumer, with appropriate
 
11 identification and for which the consumer credit reporting agency
 
12 has a file, to notify the consumer credit reporting agency of the
 
13 consumer's election to have the consumer's name removed from any
 
14 list of names and addresses provided by the consumer credit
 
15 reporting agency, and by any affiliated consumer credit reporting
 
16 agency, pursuant to subsection (b)(2).  Compliance with the
 
17 requirements of this subsection by a consumer credit reporting
 
18 agency shall constitute compliance with those requirements by any
 
19 affiliate of that consumer credit reporting agency.
 
20      (e)  Each consumer credit reporting agency that compiles and
 
21 maintains files on consumers on a nationwide basis shall
 
22 establish and maintain a notification system under subsection (d)
 
23 jointly with its affiliated consumer credit reporting agencies.
 

 
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                                     S.B. NO.           201
                                                        
                                                        

 
 1         -5 Release of consumer information to government
 
 2 agencies.  Notwithstanding section      -4, a consumer credit
 
 3 reporting agency may release to a government agency a consumer's
 
 4 name, address, former address, places of employment, or former
 
 5 places of employment.
 
 6         -6  Consumer credit report content restrictions.(a)
 
 7 No consumer credit reporting agency shall make any consumer
 
 8 credit report containing any of the following items of
 
 9 information:
 
10      (1)  Bankruptcies that, from the date of adjudication,
 
11           antedate the report by more than ten years;
 
12      (2)  Suits and judgments that, from the date of entry or
 
13           renewal, antedate the report by more than seven years
 
14           or until the governing statute of limitations has
 
15           expired, whichever is the longer period;
 
16      (3)  Unlawful detainer actions, unless the lessor was the
 
17           prevailing party.  For purposes of this paragraph, the
 
18           lessor shall be deemed to be the prevailing party only
 
19           if:
 
20           (A)  Final judgment was awarded to the lessor:
 
21                (i)  Upon entry of the tenant's default;
 
22               (ii)  Upon the granting of the lessor's motion for
 
23                     summary judgment; or
 

 
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 1              (iii)  Following trial; or
 
 2           (B)  The action was resolved by a written settlement
 
 3                agreement between the parties that states that the
 
 4                unlawful detainer action may be reported.  In any
 
 5                other instance in which the action is resolved by
 
 6                settlement agreement, the lessor shall not be
 
 7                deemed to be the prevailing party for purposes of
 
 8                this paragraph;
 
 9      (4)  Paid tax liens that, from the date of payment, antedate
 
10           the report by more than seven years;
 
11      (5)  Accounts placed for collection or charged to profit and
 
12           loss that antedate the report by more than seven years;
 
13      (6)  Records of arrest, indictment, information, misdemeanor
 
14           complaint, or conviction of a crime that, from the date
 
15           of disposition, release, or parole, antedate the report
 
16           by more than seven years.  These items of information
 
17           shall not be reported if at any time it is learned that
 
18           in the case of a conviction, a full pardon has been
 
19           granted, or in the case of an arrest, indictment,
 
20           information, or misdemeanor complaint, a conviction did
 
21           not result; and
 
22      (7)  Any other adverse information that antedates the report
 
23           by more than seven years.
 

 
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 1      (b)  The seven year period specified in subsection (a)(5)
 
 2 and (7), shall commence, with respect to any account that is
 
 3 placed for collection, internally or by referral to a third
 
 4 party, whichever is earlier, charged to profit and loss, or
 
 5 subjected to any similar action, upon the expiration of the one-
 
 6 hundred-eighty day period beginning on the date of the
 
 7 commencement of the delinquency that immediately preceded the
 
 8 collection activity, charge to profit and loss, or similar
 
 9 action.  Where more than one of these actions is taken with
 
10 respect to a particular account, the seven year period specified
 
11 in subsection (a)(5) and (7) shall commence concurrently for all
 
12 these actions on the date of the first of these actions.
 
13      (c)  Any consumer credit reporting agency that furnishes a
 
14 consumer credit report containing information regarding any case
 
15 involving a consumer arising under the bankruptcy provisions of
 
16 Title 11 of the United States Code, shall include an
 
17 identification of the chapter of Title 11 of the United States
 
18 Code under which the case arose if that can be ascertained from
 
19 what was provided to the consumer credit reporting agency by the
 
20 source of the information.
 
21      (d)  A consumer credit report shall not include any adverse
 
22 information concerning a consumer antedating the report by more
 
23 than ten years or that otherwise is prohibited from being
 

 
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 1 included in a consumer credit report.
 
 2      (e)  If a consumer credit reporting agency is notified by a
 
 3 furnisher of credit information that an open-end credit account
 
 4 of the consumer has been closed by the consumer, any subsequent
 
 5 consumer credit report issued by the consumer credit reporting
 
 6 agency regarding that consumer that contains information on that
 
 7 open-end credit account, shall indicate the fact that the
 
 8 consumer has closed the account.
 
 9      For the purpose of this subsection, "open-end" credit
 
10 account does not include any demand deposit account such as a
 
11 checking account, money market account, or share draft account.
 
12      (f)  Consumer credit reporting agencies shall not include
 
13 medical information in their files on consumers or furnish
 
14 medical information for employment or credit purposes in a
 
15 consumer credit report without the consent of the consumer.
 
16      (g)  A consumer credit reporting agency shall include in any
 
17 consumer credit report information any failure of the consumer to
 
18 pay overdue child or spousal support, where the information
 
19 either was provided to the consumer credit reporting agency
 
20 pursuant to section 576D-6(a)(6), or has been provided to the
 
21 consumer credit reporting agency and verified by another federal,
 
22 state, or county government agency.
 
23         -7  Protection of credit records by credit reporting
 

 


 

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 1 agencies.  (a)  Every consumer credit reporting agency shall
 
 2 maintain reasonable procedures designed to avoid violations of
 
 3 section      -6 and to limit furnishing of consumer credit
 
 4 reports for the purposes listed under section      -4.  These
 
 5 procedures shall require that prospective users of the
 
 6 information identify themselves, certify the purposes for which
 
 7 the information is sought, and certify that the information will
 
 8 be used for no other purposes.  From the effective date of this
 
 9 Act, every consumer credit reporting agency shall keep a record
 
10 of the purposes as stated by the user.  Every consumer credit
 
11 reporting agency shall make a reasonable effort to verify the
 
12 identity of a new prospective user and the uses certified by the
 
13 prospective user prior to furnishing a consumer report to the
 
14 user.  
 
15      No consumer credit reporting agency may furnish a consumer
 
16 credit report to any person unless the consumer credit reporting
 
17 agency has reasonable grounds to believe that the consumer credit
 
18 report shall be used by the person for the purposes listed in
 
19 section      -4.  A consumer credit reporting agency does not
 
20 have reasonable grounds for believing that a consumer credit
 
21 report will be used by the person for the purposes of
 
22 section      -4 unless all of the following requirements are met:
 
23      (1)  If the prospective user is a credit seller as defined
 

 
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 1           in section 476-1, and intends to issue credit to a
 
 2           consumer who appears in person on the basis of an
 
 3           application for credit submitted in person, the
 
 4           consumer credit reporting agency, with a reasonable
 
 5           degree of certainty, shall match at least three
 
 6           categories of identifying information within the file
 
 7           maintained by the consumer credit reporting agency on
 
 8           the consumer with the information provided to the
 
 9           consumer credit reporting agency by the retail seller.
 
10           The categories of identifying information may include,
 
11           but are not limited to, the consumer's first and last
 
12           name, date of birth, driver's license number if
 
13           different from the consumer's social security number,
 
14           place of employment, current residence address, and
 
15           previous residence address.  The categories of
 
16           information shall not include the consumer's social
 
17           security number or mother's maiden name;
 
18      (2)  If the prospective user is a credit seller, as defined
 
19           in section 476-1, and intends to issue credit to a
 
20           consumer who appears in person on the basis of an
 
21           application for credit submitted in person, the credit
 
22           seller certifies, in writing, to the consumer credit
 
23           reporting agency that it instructs its employees and
 

 
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 1           agents to inspect a photo identification of the
 
 2           consumer at the time the application was submitted in
 
 3           person.  This paragraph does not apply to an
 
 4           application for credit submitted by mail; and
 
 5      (3)  If the prospective user of a credit report intends to
 
 6           extend credit pursuant to a solicitation by mail, the
 
 7           extension of credit shall be mailed to the same address
 
 8           as on the solicitation unless the prospective user of
 
 9           the credit report verifies any address change by, among
 
10           other methods, contacting the person to whom the credit
 
11           is extended.
 
12      (b)  Whenever a consumer credit reporting agency prepares a
 
13 consumer credit report, it shall follow reasonable procedures to
 
14 assure maximum possible accuracy of the information concerning
 
15 the individual about whom the report relates.  These reasonable
 
16 procedures shall include, but not be limited to, permanent
 
17 retention by the consumer credit reporting agency in the
 
18 consumer's file, or a separately individualized file, of that
 
19 portion of the data in the file that is used by the consumer
 
20 credit reporting agency to identify the individual consumer
 
21 pursuant to subsection (a)(1).  This permanently retained data
 
22 shall be available for use in either a reinvestigation pursuant
 
23 to section      -9(a), an investigation where the consumer has
 

 
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 1 filed a police report pursuant to section      -9(k), or a
 
 2 restoration of a file involving the consumer.  If the permanently
 
 3 retained identifying information is retained in a consumer's
 
 4 file, it shall be clearly identified in the file in order for an
 
 5 individual who reviews the file to easily distinguish between the
 
 6 permanently stored identifying information and any other
 
 7 identifying information that may be a part of the file.  This
 
 8 retention requirement shall not apply to data that is reported in
 
 9 error, that is obsolete, or that is found to be inaccurate
 
10 through the results of a reinvestigation initiated by a consumer
 
11 pursuant to section      -9(a).
 
12      (c)  No consumer credit reporting agency shall prohibit any
 
13 user of any consumer credit report furnished by the consumer
 
14 credit reporting agency from disclosing the contents of the
 
15 consumer credit report to the consumer who is the subject of the
 
16 report if adverse action may be taken by the user based in whole
 
17 or in part on the consumer credit report.  The act of disclosure
 
18 to the consumer by the user, of the contents of a consumer credit
 
19 report shall not be a basis for liability of the consumer credit
 
20 reporting agency or the user under section      -21.
 
21      (d)  A consumer credit reporting agency shall provide
 
22 written notice to any person who regularly and in the ordinary
 
23 course of business supplies information to the consumer credit
 

 
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 1 reporting agency concerning any consumer, or to whom a consumer
 
 2 credit report is provided by the consumer credit reporting
 
 3 agency.  The notice shall specify the person's obligations under
 
 4 this chapter.  Copies of the appropriate statutory sections shall
 
 5 satisfy the requirement of this subsection.
 
 6           -8  Consumer inspection of credit file; summary of
 
 7 consumer rights.  (a)  A consumer credit reporting agency shall
 
 8 supply files and information required under section      -3
 
 9 during normal business hours and on reasonable notice.  In
 
10 addition to the disclosure provided by this chapter and any
 
11 disclosures received by the consumer, the consumer has the right
 
12 to request and receive all of the following:
 
13      (1)  Either a decoded written version of the file or a
 
14           written copy of the file, including all information in
 
15           the file at the time of the request, with an
 
16           explanation of any code used;
 
17      (2)  A record of all inquiries, by recipient, which result
 
18           in the provision of information concerning the consumer
 
19           in connection with a credit transaction that is not
 
20           initiated by the consumer and which were received by
 
21           the consumer credit reporting agency in the six month
 
22           period immediately preceding the request for disclosure
 
23           under this section; and
 

 
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 1      (3)  The recipients, including end users specified in
 
 2           section      -17, of any consumer credit report on the
 
 3           consumer which the consumer credit reporting agency has
 
 4           furnished:
 
 5           (A)  For employment purposes within the two year period
 
 6                preceding the request; or
 
 7           (B)  For any other purpose within the six month period
 
 8                preceding the request.
 
 9           For purposes of this paragraph, "identification" as
 
10           used in section      -17 includes the name of the
 
11           recipient or, if applicable, the business name under
 
12           which the recipient does business.  If requested by the
 
13           consumer, the identification shall also include the
 
14           address of the recipient.
 
15      (b)  Files maintained on a consumer shall be disclosed
 
16 promptly as follows:
 
17      (1)  In person, at the location where the consumer credit
 
18           reporting agency maintains the trained personnel
 
19           required by subsection (d), if the consumer appears in
 
20           person and furnishes proper identification;
 
21      (2)  By mail, if the consumer makes a written request with
 
22           proper identification for a copy of the file or a
 
23           decoded written version of that file to be sent to the
 

 
Page 25                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           consumer at a specified address.  A disclosure pursuant
 
 2           to this paragraph shall be deposited in the United
 
 3           States mail, postage prepaid, within five business days
 
 4           after the consumer's written request for the disclosure
 
 5           is received by the consumer credit reporting agency.
 
 6           Consumer credit reporting agencies complying with
 
 7           requests for mailings under this section shall not be
 
 8           liable for disclosures to third parties caused by
 
 9           mishandling of mail after the mailings leave the
 
10           consumer reporting agencies;
 
11      (3)  A summary of all information contained in files on a
 
12           consumer and required by section      -3 shall be
 
13           provided by telephone, if the consumer has made a
 
14           written request, with proper identification for
 
15           telephone disclosure; and
 
16      (4)  Information in a consumer's file required in writing
 
17           under this section may also be disclosed in another
 
18           form if authorized by the consumer and if available
 
19           from the consumer credit reporting agency.  For this
 
20           purpose, a consumer may request disclosure in person
 
21           pursuant to section      -3, by telephone upon
 
22           disclosure of proper identification by the consumer, by
 
23           electronic means if available from the consumer credit
 

 
Page 26                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           reporting agency, or by any other reasonable means that
 
 2           is available from the consumer credit reporting agency.
 
 3      For purposes of this subsection, "proper identification"
 
 4 means information generally deemed sufficient to identify a
 
 5 person.  If the consumer is unable to reasonably identify oneself
 
 6 with the information described above, a consumer credit reporting
 
 7 agency may require additional information concerning the
 
 8 consumer's employment and personal or family history in order to
 
 9 verify the consumer's identity.
 
10      (c)  The consumer credit reporting agency shall provide
 
11 trained personnel to explain to the consumer any information
 
12 furnished to the consumer pursuant to section      -3.
 
13      (d)  The consumer may be accompanied by one other person of
 
14 the consumer's choosing, who shall furnish reasonable
 
15 identification.  A consumer credit reporting agency may require
 
16 the consumer to furnish a written statement granting permission
 
17 to the consumer credit reporting agency to discuss the consumer's
 
18 file in that person's presence.
 
19      (e)  Any written disclosure by a consumer credit reporting
 
20 agency to any consumer pursuant to this section shall include a
 
21 written summary of all rights the consumer has under this chapter
 
22 and in the case of a consumer credit reporting agency which
 
23 compiles and maintains consumer credit reports on a nationwide
 

 
Page 27                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 basis, a toll-free telephone number which the consumer can use to
 
 2 communicate with the consumer credit reporting agency.  The
 
 3 written summary of rights required under this subsection is
 
 4 sufficient if it is in substantially the following form:
 
 5                "You have a right to obtain a copy of your credit
 
 6           file from a consumer credit reporting agency.  You may
 
 7           be charged a reasonable fee not to exceed $          .
 
 8           There is no fee, if you have been turned down for
 
 9           credit, employment, insurance, or a rental dwelling
 
10           because of information in your credit report within the
 
11           preceding sixty days.  The consumer credit reporting
 
12           agency must provide someone to help you interpret the
 
13           information in your credit file.
 
14                You have a right to dispute inaccurate information
 
15           by contacting the consumer credit reporting agency
 
16           directly.  However, neither you nor any credit repair
 
17           company or credit service organization has the right to
 
18           have accurate, current, and verifiable information
 
19           removed from your credit report.  Under the Federal
 
20           Fair Credit Reporting Act, the consumer credit
 
21           reporting agency must remove accurate, negative
 
22           information from your report only if it is over seven
 
23           years old.  Bankruptcy information can be reported for
 

 
Page 28                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           ten years.
 
 2                If you have notified a credit reporting agency in
 
 3           writing that you dispute the accuracy of information in
 
 4           your file, the consumer credit reporting agency must,
 
 5           within thirty business days, reinvestigate and modify
 
 6           or remove inaccurate information.  The consumer credit
 
 7           reporting agency may not charge a fee for this service.
 
 8           Any pertinent information and copies of all documents
 
 9           you have concerning an error should be given to the
 
10           consumer credit reporting agency.
 
11                If reinvestigation does not resolve the dispute to
 
12           your satisfaction, you may send a brief statement to
 
13           the consumer credit reporting agency to keep in your
 
14           file, explaining why you think the record is
 
15           inaccurate.  The consumer credit reporting agency must
 
16           include your statement about disputed information in a
 
17           report it issues about you.
 
18                You have a right to receive a record of all
 
19           inquiries relating to a credit transaction initiated in
 
20           six months preceding your request.  This record shall
 
21           include the recipients of any consumer credit report.
 
22                You may request in writing that the information
 
23           contained in your file not be provided to a third party
 

 
Page 29                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           for marketing purposes.
 
 2                You have a right to bring civil action against
 
 3           anyone who improperly obtains access to a file or
 
 4           knowingly or wilfully misuses file data."
 
 5           -9  Accuracy of credit file disputed by consumer;
 
 6 resolution.(a)  If the completeness or accuracy of any item of
 
 7 information contained in the consumer's file is disputed by a
 
 8 consumer, and the dispute is conveyed directly to the consumer
 
 9 credit reporting agency by the consumer or user on behalf of the
 
10 consumer, the consumer credit reporting agency, within a
 
11 reasonable period of time and without charge, shall reinvestigate
 
12 and record the current status of the disputed information before
 
13 the end of the thirty business day period beginning on the date
 
14 the agency received notice of the dispute from the consumer or
 
15 user, unless the consumer credit reporting agency has reasonable
 
16 grounds to believe and determines that the dispute by the
 
17 consumer is frivolous or irrelevant, including failure of the
 
18 consumer to provide sufficient information, as requested by the
 
19 consumer credit reporting agency, to resolve the dispute.  Unless
 
20 the consumer credit reporting agency determines that the dispute
 
21 is frivolous or irrelevant, before the end of the five business
 
22 day period beginning on the date the consumer credit reporting
 
23 agency received notice of dispute under this section, the agency
 

 
Page 30                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 shall notify any person who provided the information in dispute
 
 2 at the address and in the manner specified by the person.  A
 
 3 consumer credit reporting agency may require that disputes by
 
 4 consumers be in writing.
 
 5      (b)  In conducting a reinvestigation, the consumer credit
 
 6 reporting agency shall review and consider all relevant
 
 7 information submitted by the consumer with respect to the
 
 8 disputed item of information.  If the consumer credit reporting
 
 9 agency determines that the dispute is frivolous or irrelevant, it
 
10 shall notify the consumer by mail or, if authorized by the
 
11 consumer for that purpose, by any other means available to the
 
12 consumer credit reporting agency, within five business days after
 
13 a determination is made that it is terminating its
 
14 reinvestigation of the item of information.  In this
 
15 notification, the consumer credit reporting agency shall state
 
16 the specific reasons why it has determined that the consumer's
 
17 dispute is frivolous or irrelevant.  If the disputed item of
 
18 information is found to be inaccurate, missing, or can no longer
 
19 be verified by the evidence submitted, the consumer credit
 
20 reporting agency shall promptly add, correct, or delete that
 
21 information from the consumer's file.
 
22      (c)  No information may be reinserted into a consumer's file
 
23 after having been deleted pursuant to this section unless the
 

 
Page 31                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 person who furnished the information verifies that the
 
 2 information is accurate.  If any information deleted from a
 
 3 consumer's file is reinserted into the file, the consumer credit
 
 4 reporting agency shall promptly notify the consumer of the
 
 5 reinsertion in writing or, if authorized by the consumer for that
 
 6 purpose, by any other means available to the consumer credit
 
 7 reporting agency.  As part of, or in addition to, this notice,
 
 8 the consumer credit reporting agency, within five business days
 
 9 of reinserting the information, shall provide the consumer in
 
10 writing:
 
11      (1)  A statement that the disputed information has been
 
12           reinserted;
 
13      (2)  A notice that the agency will provide to the consumer,
 
14           within fifteen days following a request, the name,
 
15           address, and telephone number of any furnisher of
 
16           information contacted or which contacted the consumer
 
17           credit reporting agency in connection with the
 
18           reinsertion;
 
19      (3)  The toll-free telephone number of the consumer credit
 
20           reporting agency that the consumer can use to obtain
 
21           this name, address, and telephone number; and
 
22      (4)  A notice that the consumer has the right to a
 
23           reinvestigation of the information reinserted by the
 

 
Page 32                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           consumer credit reporting agency and to add a statement
 
 2           to the consumer's file disputing the accuracy or
 
 3           completeness of the information.
 
 4      (d)  a consumer credit reporting agency shall provide notice
 
 5 to the consumer of the results of any reinvestigation under this
 
 6 subsection, within five days of completion of the
 
 7 reinvestigation.  The notice shall include:
 
 8      (1)  A statement that the reinvestigation is completed;
 
 9      (2)  A consumer credit report that is based on the
 
10           consumer's file as that file is revised as a result of
 
11           the reinvestigation;
 
12      (3)  A description or indication of any changes made in the
 
13           consumer credit report as a result of those revisions
 
14           to the consumer's file;
 
15      (4)  A notice that, if requested by the consumer, a
 
16           description of the procedure used to determine the
 
17           accuracy and completeness of the information shall be
 
18           provided to the consumer by the consumer credit
 
19           reporting agency, including the name, business address,
 
20           and telephone number of any furnisher of information
 
21           contacted in connection with that information;
 
22      (5)  A notice that the consumer has the right to add a
 
23           statement to the consumer's file disputing the accuracy
 

 
Page 33                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           or completeness of the information; and
 
 2      (6)  A notice that the consumer has the right to request
 
 3           that the consumer credit reporting agency furnish
 
 4           notifications under subsection (h).  A consumer credit
 
 5           reporting agency shall provide the notice pursuant to
 
 6           this subsection respecting the procedure used to
 
 7           determine the accuracy and completeness of information,
 
 8           not later than fifteen days after receiving a request
 
 9           from the consumer.
 
10      (e)  The presence of information in the consumer's file that
 
11 contradicts the contention of the consumer, in and of itself,
 
12 shall not constitute reasonable grounds for believing the dispute
 
13 is frivolous or irrelevant.
 
14      (f)  If the consumer credit reporting agency determines that
 
15 the dispute is frivolous or irrelevant, or if the reinvestigation
 
16 does not resolve the dispute, or if the information is reinserted
 
17 into the consumer's file pursuant to subsection (c), the consumer
 
18 may file a brief statement setting forth the nature of the
 
19 dispute.  The consumer credit reporting agency may limit these
 
20 statements to not more than one hundred words if the agency
 
21 provides the consumer with assistance in writing a clear summary
 
22 of the dispute.
 
23      (g)  Whenever a statement of dispute is filed, the consumer
 

 
Page 34                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 credit reporting agency, in any subsequent consumer credit report
 
 2 containing the information in question, shall clearly note that
 
 3 the information is disputed by the consumer and shall include in
 
 4 the report either the consumer's statement or a clear and
 
 5 accurate summary thereof.
 
 6      (h)  Following the deletion of information from a consumer's
 
 7 file pursuant to this section, or following the filing of a
 
 8 statement of dispute pursuant to subsection (f), the consumer
 
 9 credit reporting agency, at the request of the consumer, shall
 
10 furnish notification that the item of information has been
 
11 deleted or that the item of information is disputed.  In the case
 
12 of disputed information, the notification shall include the
 
13 statement or summary of the dispute filed pursuant to subsection
 
14 (f).  This notification shall be furnished to any person,
 
15 specifically designated by the consumer, who, within two years
 
16 prior to the deletion or the filing of the dispute, has received
 
17 a consumer credit report concerning the consumer for employment
 
18 purposes, or who, within six months of the deletion or the filing
 
19 of the dispute, has received a consumer credit report concerning
 
20 the consumer for any other purpose, if these consumer credit
 
21 reports contained the deleted or disputed information.
 
22      The consumer credit reporting agency shall clearly and
 
23 conspicuously disclose to the consumer the consumer's rights to
 

 
Page 35                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 make a request for this notification.  The disclosure shall be
 
 2 made at or prior to the time the information is deleted pursuant
 
 3 to this section, or the consumer's statement regarding the
 
 4 disputed information is received pursuant to subsection (f).
 
 5      (i)  A consumer credit reporting agency shall maintain
 
 6 reasonable procedures designed to prevent the reappearance in a
 
 7 consumer's file and in consumer credit reports of information
 
 8 that has been deleted pursuant to this section and not reinserted
 
 9 pursuant to subsection (c).
 
10      (j)  If the consumer's dispute is resolved by deletion of
 
11 the disputed information within three business days, beginning
 
12 with the day the consumer credit reporting agency receives notice
 
13 of the dispute in accordance with subsection (a), and provided
 
14 that verification thereof is provided to the consumer in writing
 
15 within five business days following the deletion, then the
 
16 consumer credit reporting agency shall be exempt from requirement
 
17 for further action under subsections (d), (f), and (g).
 
18      (k)  If a consumer submits to a credit reporting agency a
 
19 copy of a valid police report filed pursuant to
 
20 section 708-     , the consumer credit reporting agency shall
 
21 promptly and permanently block reporting any information that the
 
22 consumer alleges to appear on the consumer's credit report as a
 
23 result of a violation of section 708-      so that the
 

 
Page 36                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 information cannot be reported.  The consumer credit reporting
 
 2 agency shall promptly notify the furnisher of the information
 
 3 that the information has been so blocked.  Furnishers of
 
 4 information and consumer credit reporting agencies shall ensure
 
 5 that information is unblocked only upon a preponderance of the
 
 6 evidence establishing the facts required under paragraph (1),
 
 7 (2), or (3).  The permanently blocked information shall be
 
 8 unblocked only if:
 
 9      (1)  The information was blocked due to fraud;
 
10      (2)  The consumer agrees that the blocked information, or
 
11           portions of the blocked information, were blocked in
 
12           error; or
 
13      (3)  The consumer knowingly obtained possession of goods,
 
14           services, or moneys as a result of the blocked
 
15           transaction or transactions or the consumer should have
 
16           known that the consumer obtained possession of those
 
17           goods, services, or moneys as a result of the blocked
 
18           transaction or transactions.  If blocked information is
 
19           unblocked pursuant to this subsection, the consumer
 
20           shall be promptly notified in the same manner as
 
21           consumers are notified of the reinsertion of
 
22           information pursuant to subsection (c).  The prior
 
23           presence of the blocked information in the consumer
 

 
Page 37                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           credit reporting agency's file on the consumer is not
 
 2           evidence of whether the consumer knew or should have
 
 3           known that the consumer obtained possession of any
 
 4           goods, services, or moneys.  
 
 5      For the purposes of this subsection, fraud may be
 
 6 demonstrated by circumstantial evidence.  In unblocking
 
 7 information pursuant to this subsection, furnishers and consumer
 
 8 credit reporting agencies shall be subject to their respective
 
 9 requirements pursuant to this chapter regarding the completeness
 
10 and accuracy of information.
 
11           -10  Allowable fees.  (a)  Except as otherwise
 
12 provided, a consumer credit reporting agency may impose a
 
13 reasonable charge upon a consumer, as follows:
 
14      (1)  For making a disclosure pursuant to section      -3 or
 
15                -8, the consumer credit reporting agency may
 
16           charge a fee not to exceed $    ; and
 
17      (2)  For furnishing a notification, statement, or summary,
 
18           to any person pursuant to section      -9(h), the
 
19           consumer credit reporting agency may charge a fee not
 
20           to exceed the charge that it would impose on each
 
21           designated recipient for a consumer credit report, and
 
22           the amount of the charge shall be indicated to the
 
23           consumer before furnishing the notification, statement,
 

 
Page 38                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           or summary.
 
 2      (b)  A consumer credit reporting agency shall make all
 
 3 disclosures pursuant to sections      -3 and      -8 and furnish
 
 4 all consumer reports pursuant to section      -9 without charge,
 
 5 if requested by the consumer within sixty days after receipt by
 
 6 the consumer of a notification of adverse action pursuant to
 
 7 section      -13 or of a notification from a debt collection
 
 8 agency affiliated with the consumer credit reporting agency
 
 9 stating that the consumer's credit rating may be or has been
 
10 adversely affected.
 
11      (c)  A consumer credit reporting agency shall not impose any
 
12 charge for:
 
13      (1)  Providing notice to a consumer required under
 
14           section      -9; or
 
15      (2)  Notifying a person pursuant to section      -9(h) of
 
16           the deletion of any information which is found to be
 
17           inaccurate or which can no longer be verified, if the
 
18           consumer designates that person to the consumer credit
 
19           reporting agency before the end of the thirty day
 
20           period beginning on that date of notice under
 
21           section      -9(d).
 
22           -11  Consumer credit reports; matters of public
 
23 record.  (a)  Each consumer credit reporting agency which
 

 
Page 39                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 compiles and reports items of information concerning consumers
 
 2 which are matters of public record, shall specify in any report
 
 3 containing public record information, the source from which that
 
 4 information was obtained, including the particular court, if
 
 5 there is a court, and the date that the information was initially
 
 6 reported or publicized.
 
 7      (b)  A consumer credit reporting agency which furnishes a
 
 8 consumer credit report for employment purposes, and which for
 
 9 that purpose compiles and reports items of information on
 
10 consumers which are matters of public record and are likely to
 
11 have an adverse effect upon a consumer's ability to obtain
 
12 employment, shall maintain strict procedures designed to ensure
 
13 that whenever public record information which is likely to have
 
14 an adverse effect on a consumer's ability to obtain employment is
 
15 reported, it is complete and up to date.  For purposes of this
 
16 subsection, items of public record relating to arrests,
 
17 indictments, convictions, suits, tax liens, and outstanding
 
18 judgments shall be considered up to date if the current public
 
19 record status of the item at the time of the report is reported.
 
20      (c)  No consumer credit reporting agency which furnishes a
 
21 consumer credit report for employment purposes shall report
 
22 information on the age, marital status, race, color, creed,
 
23 religion, or sexual preference of any consumer.
 

 
Page 40                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           -12  Use of credit file information for marketing
 
 2 purposes; prevention.  Every consumer credit reporting agency,
 
 3 upon written request and the furnishing of sufficient
 
 4 identification to identify the consumer and the subject file,
 
 5 shall create reasonable procedures to prevent a consumer credit
 
 6 report or information from a consumer's file from being provided
 
 7 to any third party for marketing purposes or for any offer of
 
 8 credit not requested by the consumer.  This section does not
 
 9 apply to the use of information by a credit grantor for purposes
 
10 related to an existing credit relationship.
 
11           -13  Adverse action based on credit report; notice to
 
12 consumer.(a)  If any person takes any adverse action with
 
13 respect to any consumer, and the adverse action is based, in
 
14 whole or in part, on any information contained in a consumer
 
15 credit report, that person shall do all of the following:
 
16      (1)  Provide written notice of the adverse action to the
 
17           consumer;
 
18      (2)  Provide the consumer with the name, address, and
 
19           telephone number of the consumer credit reporting
 
20           agency which furnished the report to the person;
 
21      (3)  Provide a statement that the credit grantor's decision
 
22           to take adverse action was based in whole or in part
 
23           upon information contained in a consumer credit report;
 

 
Page 41                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           and
 
 2      (4)  Provide the consumer with a written notice of the
 
 3           following rights of the consumer:
 
 4           (A)  The right of the consumer to obtain within sixty
 
 5                days a free copy of the consumer's consumer credit
 
 6                report from the consumer credit reporting agency
 
 7                identified pursuant to paragraph (2) and from any
 
 8                other consumer credit reporting agency which
 
 9                compiles and maintains files on consumers on a
 
10                nationwide basis; and
 
11           (B)  The right of the consumer under section      -9 to
 
12                dispute the accuracy or completeness of any
 
13                information in a consumer credit report furnished
 
14                by the consumer credit reporting agency.
 
15      (b)  Whenever credit or insurance for personal, family, or
 
16 household purposes involving a consumer is denied or the charge
 
17 for credit is increased either wholly or in part because of
 
18 information obtained from a person other than a consumer credit
 
19 reporting agency bearing upon consumer's creditworthiness or
 
20 credit standing, the user of that information, within a
 
21 reasonable period of time, and upon the consumer's written
 
22 request for the reasons for that adverse action received within
 
23 sixty days after learning of the adverse action, shall disclose
 

 
Page 42                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 the nature and substance of the information to the consumer.  The
 
 2 user of the information shall clearly and accurately disclose to
 
 3 the consumer the consumer's right to make a written request at
 
 4 the time the adverse action is communicated to the consumer.
 
 5      (c)  No person shall be held liable for any violation of
 
 6 this section if that person shows by a preponderance of the
 
 7 evidence that at the time of the alleged violation, the person
 
 8 maintained reasonable procedures to assure compliance with this
 
 9 section.
 
10      (d)  Nothing in this chapter shall excuse compliance with
 
11 the requirements of section 477E-    .
 
12           -14  Credit transaction not initiated by the consumer;
 
13 requirements.  (a)  Except as provided in subsection (b), any
 
14 person who uses a consumer credit report in connection with any
 
15 credit transaction not initiated by the consumer and which
 
16 consists of a firm offer of credit shall provide with any
 
17 solicitation made to the consumer a clear and conspicuous
 
18 statement as to all of the following:
 
19      (1)  Information contained in the consumer's prequalifying
 
20           report was used in connection with the transaction;
 
21      (2)  The consumer received the offer of credit because the
 
22           consumer satisfied the criteria for creditworthiness
 
23           under which the consumer was selected for the offer;
 

 
Page 43                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1      (3)  Where applicable, the credit may not be extended if,
 
 2           after the consumer responds to the offer, the consumer
 
 3           does not meet the criteria used to select the consumer
 
 4           for the offer; and
 
 5      (4)  The consumer has a right to prohibit use of information
 
 6           contained in the consumer's file with any consumer
 
 7           credit reporting agency in connection with any credit
 
 8           transaction that is not initiated by the consumer.  The
 
 9           consumer may exercise this right by notifying the
 
10           notification system or joint notification system
 
11           established under section      -4(d) or (e).
 
12      (b)  Subsection (a) does not apply to any person using a
 
13 prequalifying report if all of the following conditions are met:
 
14      (1)  The person using the prequalifying report is affiliated
 
15           by common ownership or common corporate control with
 
16           the person who procured the report;
 
17      (2)  The person who procures the prequalifying report from
 
18           the consumer credit reporting agency clearly and
 
19           conspicuously discloses to the consumer to whom the
 
20           report relates, before the prequalifying report is
 
21           provided to the person who uses the report, that the
 
22           prequalifying report may be provided to, and used by,
 
23           persons affiliated in the manner specified in paragraph
 

 
Page 44                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           (1) with the person that procured the report; and
 
 2      (3)  The consumer consents in writing to this provision and
 
 3           use of the prequalifying report.
 
 4      (c)  No person shall be denied credit on the basis of the
 
 5 consumer's refusal to provide consent pursuant to subsection
 
 6 (b)(3), unless that consent is necessary for the extension of
 
 7 credit, related to that transaction, by an affiliate.
 
 8           -15  Employment use of consumer credit reports.(a)
 
 9 Prior to requesting a consumer credit report for employment
 
10 purposes, the user of the report shall provide written notice to
 
11 the person involved.  The notice shall inform the person that a
 
12 report will be used and include the source of the report, and
 
13 shall contain a box that the person may check off to receive a
 
14 copy of the credit report.  If the consumer indicates that the
 
15 consumer wishes to receive a copy of the report, the user shall
 
16 request that a copy be provided to the person when the user
 
17 requests its copy from the credit reporting agency.  The report
 
18 to the user and to the subject person shall be provided
 
19 contemporaneously and at no charge to the subject person.
 
20      (b)  Whenever employment involving a consumer is denied
 
21 either wholly or partly because of information contained in a
 
22 consumer credit report from a consumer credit reporting agency,
 
23 the user of the consumer credit report shall advise the consumer
 

 
Page 45                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 against whom the adverse action has been taken and supply the
 
 2 name and address or addresses of the consumer credit reporting
 
 3 agency making the report.  No person shall be held liable for any
 
 4 violation of this section if that person shows by a preponderance
 
 5 of the evidence that, at the time of the alleged violation, the
 
 6 person maintained reasonable procedures to assure compliance with
 
 7 this section.
 
 8           -16  Authority for a user to request an investigation
 
 9 of a consumer's credit report.(a)  A user in its discretion may
 
10 notify the consumer that upon the consumer's authorization, the
 
11 user may contact the consumer reporting agency and request that
 
12 the consumer reporting agency investigate the current status of
 
13 an item or items of information contained in the consumer report
 
14 if the consumer disputes the completeness or accuracy of an item
 
15 or items of information as provided to the user.
 
16      (b)  The consumer credit reporting agency may require
 
17 identification from the user to ensure the validity of the
 
18 request and may require that the request be put in writing with
 
19 proper identification.
 
20      (c)  If any request made pursuant to subsection (a) is made
 
21 and identification given in the form or manner demanded by the
 
22 consumer credit reporting agency, the agency shall review the
 
23 file of the consumer and report the current status of the
 

 
Page 46                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 disputed information to the user and the consumer by the most
 
 2 expeditious means possible.
 
 3      (d)  No user who furnishes information pursuant to this
 
 4 section shall be liable to any person for furnishing the
 
 5 information.
 
 6           -17  Resale of consumer credit reports.  (a)  A person
 
 7 may not procure a consumer credit report for the purpose of
 
 8 reselling the report or any information therein unless the person
 
 9 discloses to the consumer credit reporting agency issuing the
 
10 report the identity of the ultimate end user and each permissible
 
11 purpose for which the report is furnished to the end user of the
 
12 consumer credit report or information therein.
 
13      (b)  A person that procures a consumer credit report for the
 
14 purpose of reselling the report or any information therein shall
 
15 do all of the following:
 
16      (1)  Establish and comply with reasonable procedures
 
17           designed to ensure that the consumer credit report or
 
18           information is resold by the person only for a purpose
 
19           for which the report may be furnished under this
 
20           chapter.  These procedures shall include all of the
 
21           following:
 
22           (A)  Identification of each prospective user of the
 
23                resold consumer credit report or information;
 

 
Page 47                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1           (B)  Certification of each purpose for which the
 
 2                consumer credit report or information will be
 
 3                used; and
 
 4           (C)  Certification that the consumer credit report or
 
 5                information will be used for no other purpose.
 
 6      (2)  Before reselling the consumer credit report or
 
 7           information, the person shall make reasonable efforts
 
 8           to verify the identities and certifications made under
 
 9           paragraph (1).
 
10           -18  Furnishing of incomplete or inaccurate
 
11 information to a consumer credit reporting agency.(a)  A person
 
12 shall not furnish information on a specific transaction or
 
13 experience to any consumer credit reporting agency if the person
 
14 knows or should know the information is incomplete or inaccurate.
 
15      (b)  A person who:
 
16      (1)  In the ordinary course of business regularly and on a
 
17           routine basis furnishes information to one or more
 
18           consumer credit reporting agencies about the person's
 
19           own transactions or experiences with one or more
 
20           consumers; and
 
21      (2)  Determines that information on a specific transaction
 
22           or experience so provided to a consumer credit
 
23           reporting agency is not complete or accurate,
 

 
Page 48                                                    
                                     S.B. NO.           201
                                                        
                                                        

 
 1 shall promptly notify the consumer credit reporting agency of
 
 2 that determination and provide to the consumer credit reporting
 
 3 agency any corrections to that information, or any additional
 
 4 information, that is necessary to make the information provided
 
 5 by the person to the consumer credit reporting agency complete
 
 6 and accurate.
 
 7      (c)  So long as the completeness or accuracy of any
 
 8 information on a specific transaction or experience furnished by
 
 9 any person to a consumer credit reporting agency is subject to a
 
10 continuing dispute between the affected consumer and that person,
 
11 the person shall not furnish the information to any consumer
 
12 credit reporting agency without also including a notice that the
 
13 information is disputed by the consumer.
 
14      (d)  A person who regularly furnishes information to a
 
15 consumer credit reporting agency regarding a consumer who has an
 
16 open-end credit account with that person, and which is closed by
 
17 the consumer, shall notify the consumer credit reporting agency
 
18 of the closure of that account by the consumer, in the
 
19 information regularly furnished for the period in which the
 
20 account is closed.
 
21      (e)  A person who places a delinquent account for collection
 
22 internally or by referral to a third party, charges the
 
23 delinquent account to profit or loss, or takes similar action,
 

 
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 1 and subsequently furnishes information to a credit reporting
 
 2 agency regarding that action, shall include within the
 
 3 information furnished the approximate commencement date of the
 
 4 delinquency which gave rise to that action, unless that date was
 
 5 previously reported to the credit reporting agency.  Nothing in
 
 6 this subsection shall require that a delinquency must be reported
 
 7 to a credit reporting agency.
 
 8      (f)  Upon receiving notice of a dispute noticed pursuant to
 
 9 section      -9(a) with regard to the completeness or accuracy of
 
10 any information provided to a consumer credit reporting agency,
 
11 the person that provided the information shall:
 
12      (1)  Complete an investigation with respect to the disputed
 
13           information and report to the consumer credit reporting
 
14           agency the results of that investigation before the end
 
15           of the thirty business day period beginning on the date
 
16           the consumer credit reporting agency receives the
 
17           notice of dispute from the consumer in accordance with
 
18           section      -9(a); and
 
19      (2)  Review relevant information submitted to it.
 
20      (g)  A person who furnishes information to a consumer credit
 
21 reporting agency is liable for failure to comply with this
 
22 section, unless the furnisher establishes by a preponderance of
 
23 the evidence that, at the time of the failure to comply with this
 

 
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 1 section, the furnisher maintained reasonable procedures to comply
 
 2 with those provisions.
 
 3           -19  Submission of negative credit information to a
 
 4 consumer credit reporting agency; requirements.(a)  As used in
 
 5 this section:
 
 6      "Creditor" includes an agent or assignee of a credit,
 
 7 including an agent engaged in administering or collecting the
 
 8 creditor's accounts.
 
 9      "Negative credit information" means information concerning
 
10 the credit history of a consumer that, because of the consumer's
 
11 past delinquencies, late or irregular payment history,
 
12 insolvency, or any form of default, would reasonably be expected
 
13 to affect adversely the consumer's ability to obtain or maintain
 
14 credit.  "Negative credit information" does not include
 
15 information or credit histories arising from a nonconsumer
 
16 transaction or any other credit transaction outside the scope of
 
17 this chapter, nor does it include inquiries about a consumer's
 
18 credit record.
 
19      (b)  A creditor may submit negative credit information
 
20 concerning a consumer to a consumer credit reporting agency, only
 
21 if the creditor notifies the consumer affected.  After providing
 
22 this notice, a creditor may submit additional information to a
 
23 credit reporting agency respecting the same transaction or
 

 
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 1 extension of credit that gave rise to the original negative
 
 2 credit information without providing additional notice.
 
 3      (c)  The notice shall be in writing and shall be delivered
 
 4 in person or mailed first class, postage prepaid, to the party's
 
 5 last known address, prior to or within thirty days after the
 
 6 transmission of the negative credit information.
 
 7      (1)  The notice may be part of any notice of default,
 
 8           billing statement, or other correspondence, and may be
 
 9           included as preprinted or standard form language in any
 
10           of these correspondences from the creditor to the
 
11           consumer.
 
12      (2)  The notice is sufficient if it is in substantially the
 
13           following form:
 
14           "As required by law, you are hereby notified that a
 
15           negative credit report reflecting on your credit record
 
16           may be submitted to a credit reporting agency if you
 
17           fail to fulfill the terms of your credit obligations."
 
18      (3)  The notice, in the creditor's discretion, may be more
 
19           specific than the form given in paragraph (2).  The
 
20           notice may include, but shall not be limited to,
 
21           particular information regarding an account or
 
22           information respecting the approximate date on which
 
23           the creditor submitted or intends to submit a negative
 

 
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 1           credit report.
 
 2      (4)  The giving of notice by a creditor as provided in this
 
 3           subsection does not create any requirement for the
 
 4           creditor to actually submit negative credit information
 
 5           to a consumer credit reporting agency.  However, this
 
 6           section shall not be construed to authorize the use of
 
 7           notice as provided in this subsection in violation of
 
 8           the federal Fair Debt Collection Practices Act, 15
 
 9           United States Code section 1592.
 
10      (d)  A creditor is liable for failure to provide notice
 
11 pursuant to this section, unless the creditor establishes, by a
 
12 preponderance of the evidence, that at the time of that failure
 
13 to give notice the creditor maintained reasonable procedures to
 
14 comply with this section.
 
15           -20  Correction of inaccurate information submitted to
 
16 a credit reporting agency.  Upon notification of the results of a
 
17 consumer credit reporting agency's reinvestigation pursuant to
 
18 section      -9, a consumer may make a written demand on any
 
19 person furnishing information to the consumer credit reporting
 
20 agency to correct any information which the consumer believes to
 
21 be inaccurate.  The person upon whom the written demand is made
 
22 shall acknowledge the demand within thirty days.  The consumer
 
23 may require the consumer credit reporting agency to indicate on
 

 
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 1 any subsequent reports issued during the dispute that the item or
 
 2 items of information are in dispute.
 
 3      If upon investigation the information is found to be
 
 4 inaccurate or incorrect, the consumer may require the consumer
 
 5 credit reporting agency to delete or correct the item or items of
 
 6 information within a reasonable time.  If within ninety days the
 
 7 consumer credit reporting agency does not receive any information
 
 8 from the person requested to furnish the information or any
 
 9 communication relative to this information from this person, the
 
10 consumer credit reporting agency shall delete the information
 
11 from the report.
 
12           -21  Civil remedies.(a)  Any consumer who suffers
 
13 damages as a result of a violation of this chapter may bring an
 
14 action in a court of competent jurisdiction to recover the
 
15 following:
 
16      (1)  In the case of a negligent violation, actual damages,
 
17           including court costs, loss of wages, reasonable
 
18           attorney's fees, and, when applicable, pain and
 
19           suffering;
 
20      (2)  In the case of a wilful violation:
 
21           (A)  Actual damages as set forth in paragraph (1);
 
22           (B)  Punitive damages of not less than $           nor
 
23                more than $           for each violation as the
 

 
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 1                court deems proper; and
 
 2           (C)  Any other relief which the court deems proper; or
 
 3      (3)  In the case of liability of a natural person for
 
 4           obtaining a consumer credit report under false
 
 5           pretenses or knowingly without a permissible purpose,
 
 6           an award of actual damages pursuant to paragraph (1) or
 
 7           paragraph (2)(A) shall be in an amount of not less than
 
 8           $          .
 
 9      (b)  Injunctive relief shall be available to any consumer
 
10 aggrieved by a violation or a threatened violation of this
 
11 chapter whether or not the consumer seeks any other remedy under
 
12 this section.
 
13      (c)  Notwithstanding any other provision of this section,
 
14 any person who wilfully violates any requirement imposed under
 
15 this chapter may be liable for punitive damages in the case of a
 
16 class action, in an amount that the court may allow.  In
 
17 determining the amount of award in any class action, the court
 
18 shall consider among relevant factors the amount of any actual
 
19 damages awarded, the frequency of the violations, the resources
 
20 of the violator, and the number of persons adversely affected.
 
21      (d)  The prevailing parties in any action commenced under
 
22 this section shall be entitled to recover court costs and
 
23 reasonable attorney's fees, unless the plaintiff only seeks and
 

 
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                                     S.B. NO.           201
                                                        
                                                        

 
 1 obtains injunctive relief to compel compliance with this chapter.
 
 2 If the plaintiff only seeks and obtains injunctive relief to
 
 3 compel compliance with this chapter, court costs and reasonable
 
 4 attorney's fees shall be awarded.
 
 5      (e)  In addition to any other remedy provided by law, a
 
 6 consumer may bring an action for a civil penalty not to exceed
 
 7 $       , against any of the following:
 
 8      (1)  A person who knowingly and wilfully obtains access to a
 
 9           file other than as provided in section      -4;
 
10      (2)  Any person who knowingly and wilfully obtains data from
 
11           a file other than as provided in section      -4;
 
12      (3)  A person who uses the data received from a file in a
 
13           manner contrary to an agreement with the consumer
 
14           credit reporting agency.
 
15      This action may also be brought by the person or entity
 
16 responsible for the file accessed.  This remedy is in addition to
 
17 any other remedy which may exist.
 
18      If a plaintiff prevails in an action under this subsection,
 
19 the plaintiff shall be awarded the civil penalty, costs, and
 
20 reasonable attorney fees.
 
21           -22  Restricted consumer tort actions; exception.
 
22 Except as provided in section      -21, no consumer may bring any
 
23 action or proceeding in the nature of defamation, invasion of
 

 
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                                     S.B. NO.           201
                                                        
                                                        

 
 1 privacy, or negligence with respect to the reporting of
 
 2 information against any consumer reporting agency, any user of
 
 3 information, or any person who furnishes information to a
 
 4 consumer reporting agency, based on information disclosed
 
 5 pursuant to section      -3,      -8, or      -13, except as to
 
 6 false information furnished with malice or wilful intent to
 
 7 injure a consumer.
 
 8           -23  Statute of limitations.  An action to enforce any
 
 9 liability created under this chapter may be brought in any court
 
10 of competent jurisdiction within two years from the date the
 
11 plaintiff knew of, or should have known of, the violation of this
 
12 chapter, but not more than seven years from the earliest date on
 
13 which liability could have arisen, except that where a defendant
 
14 has materially and wilfully misrepresented any information
 
15 required under this chapter to be disclosed to a consumer and the
 
16 information so misrepresented is material to the establishment of
 
17 the defendant's liability to the consumer under this chapter, the
 
18 action may be brought at any time within two years after the
 
19 discovery by the consumer of the misrepresentation.
 
20           -24  State actions preempted by federal actions. (a)
 
21 Any consumer credit reporting agency or user of information
 
22 against whom an action brought pursuant to section 1681(n) or
 
23 1681(o) of Title 15 of the United States Code is pending, shall
 

 
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 1 not be subject to suit for the same act or omission under
 
 2 section     -21.
 
 3      (b)  The entry of a final judgment against a consumer credit
 
 4 reporting agency or user of information in an action brought
 
 5 pursuant to section 1681(n) or (o) of Title 15 of the United
 
 6 States Code shall be a bar to the maintenance of any action based
 
 7 on the same act or omission which might be brought under this
 
 8 chapter.
 
 9           -25  Exclusions from this chapter.  This chapter does
 
10 not apply to any consumer credit report which by its terms is
 
11 limited to disclosures from public records relating to land and
 
12 land titles and does not apply to any person whose records and
 
13 files are maintained for the primary purpose of reporting those
 
14 portions of the public records which impart constructive notice
 
15 under the law of matters relating to land and land titles, nor
 
16 does it apply to transactions by mail where the credit grantor
 
17 and its major credit application processing office are located
 
18 outside of the State."
 
19      SECTION 3.  Chapter 477E, Hawaii Revised Statutes, is
 
20 amended by adding a new section to be appropriately designated
 
21 and to read as follows:
 
22      "477E-     Credit denial disclosure.  (a)  Within thirty
 
23 days, or at a reasonable later time as specified in federal law
 

 
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                                     S.B. NO.           201
                                                        
                                                        

 
 1 or regulations, after receipt of a completed written application
 
 2 for credit, a creditor shall notify the applicant of the
 
 3 creditor's action on the application.
 
 4      (b)  Each applicant denied credit shall be entitled to a
 
 5 statement of reasons from the creditor for denial of credit.  A
 
 6 creditor satisfies this obligation by:
 
 7      (1)  Providing statements of reasons in writing to
 
 8           applicants denied credit; or
 
 9      (2)  Giving written notification of credit denial which
 
10           discloses:
 
11           (A)  The applicant's right to request a statement of
 
12                reasons for denial of credit within sixty days
 
13                after notification of denial of credit, to which
 
14                the creditor has thirty days to respond upon
 
15                receipt of the request; and
 
16           (B)  The identity and address of the person or office
 
17                from which the statement of reasons for denial of
 
18                credit may be obtained;
 
19      (3)  The statement of reasons may be given orally if the
 
20           written notification advises the applicant of the right
 
21           to have the statement of reasons confirmed in writing
 
22           on written request.
 
23      (c)  A statement of reasons meets the requirements of this
 

 
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 1 section only if it contains the specific reasons for the credit
 
 2 denial."
 
 3      SECTION 4.  Chapter 708, Hawaii Revised Statutes, is amended
 
 4 by adding a new section to be appropriately designated and to
 
 5 read as follows:
 
 6      "708-       Identity theft.  (a)  Every person who wilfully
 
 7 obtains personal identifying information, as defined in
 
 8 subsection (b), of another person without the authorization of
 
 9 that person, and uses that information to obtain, or attempt to
 
10 obtain, credit, goods, or services in the name of the other
 
11 person without the consent of that other person, is punishable in
 
12 the same manner and to the same extent as for the varying degrees
 
13 of theft.
 
14      (b)  As used in this section, "personal identifying
 
15 information", means the name, address, social security number,
 
16 telephone number, driver's license number if different from a
 
17 social security number, place of employment, employee
 
18 identification number, mother's maiden name, demand deposit
 
19 account number, savings account number, or credit card number of
 
20 an individual person."
 
21      SECTION 5.  New statutory material is underscored.
 
22      SECTION 6.  This Act shall take effect upon its approval.
 
23 
 
24                           INTRODUCED BY:  _______________________