House File 2322 - Introduced



                                       HOUSE FILE       
                                       BY  DE BOEF, JACOBS, MAY,
                                           and PAULSEN


    Passed House, Date               Passed Senate,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act concerning offenses against identity by providing a
  2    procedure to secure credit information and providing a
  3    penalty.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 5094YH 82
  6 rn/rj/14

PAG LIN



  1  1    Section 1.  NEW SECTION.  714F.1  DEFINITIONS.
  1  2    For the purposes of this chapter, unless the context
  1  3 otherwise requires:
  1  4    1.  "Consumer" means an individual.
  1  5    2.  "Consumer report" means any information relating to the
  1  6 creditworthiness of a consumer.
  1  7    3.  "Consumer reporting agency" means any person or entity
  1  8 engaged in the practice of assembling or evaluating consumer
  1  9 credit information for the purpose of furnishing a consumer
  1 10 report to a third party.  A consumer reporting agency shall
  1 11 not include any of the following:
  1 12    a.  A check service or fraud prevention service company
  1 13 that reports on incidents of fraud or issues authorizations
  1 14 for the purpose of approving or processing negotiable
  1 15 instruments, electronic fund transfers, or similar methods of
  1 16 payment.
  1 17    b.  A deposit account information service company that
  1 18 issues reports regarding account closures due to fraud,
  1 19 overdrafts, automated teller machine abuse, or similar
  1 20 negative information regarding a consumer to inquiring
  1 21 financial institutions for use only in reviewing the
  1 22 consumer's request for a deposit account at the inquiring
  1 23 financial institution.
  1 24    c.  Any person or entity engaged in the practice of
  1 25 assembling and merging information contained in a database of
  1 26 one or more consumer reporting agencies and does not maintain
  1 27 a permanent database of credit information from which new
  1 28 consumer reports are produced.
  1 29    4.  "Identification information" means as defined in
  1 30 section 715A.8.
  1 31    5.  "Identity theft" means as used in section 715A.8.
  1 32    6.  "Proper identification" means sufficient identification
  1 33 information to ascertain that individual's identity.
  1 34    7.  "Security freeze" means a hold placed on a consumer
  1 35 report that prevents a consumer reporting agency from
  2  1 releasing a consumer report without first obtaining the
  2  2 consumer's express authorization.
  2  3    Sec. 2.  NEW SECTION.  714F.2  SECURITY FREEZE.
  2  4    A consumer may submit by certified mail to a consumer
  2  5 reporting agency a written request for a security freeze.  The
  2  6 consumer must submit proper identification with the request.
  2  7 Within five business days after receiving the request, the
  2  8 consumer reporting agency shall commence the security freeze.
  2  9 Within ten business days after commencing the security freeze,
  2 10 the consumer reporting agency shall send a written
  2 11 confirmation to the consumer of the security freeze, a
  2 12 personal identification number or password, other than the
  2 13 consumer's social security number, for the consumer to use in
  2 14 authorizing the suspension or removal of the security freeze,
  2 15 including information on how the security freeze may be
  2 16 temporarily suspended.
  2 17    Sec. 3.  NEW SECTION.  714F.3  TEMPORARY SUSPENSION.
  2 18    A consumer may request that a security freeze be
  2 19 temporarily suspended to allow the consumer reporting agency
  2 20 to release the consumer report for a specific time period or
  2 21 to a specific third party.  The consumer reporting agency may
  2 22 develop procedures to expedite the receipt and processing of
  2 23 requests which may involve the use of telephones, facsimile
  2 24 transmissions, the internet, or other electronic media.  The
  2 25 consumer reporting agency shall comply with the request within
  2 26 three business days after receiving the request.  The
  2 27 consumer's request shall include all of the following:
  2 28    1.  Proper identification.
  2 29    2.  The personal identification number or password provided
  2 30 by the consumer reporting agency.
  2 31    3.  Explicit instructions of the specific time period or
  2 32 specific third party designated for suspension of the security
  2 33 freeze.
  2 34    Sec. 4.  NEW SECTION.  714F.4  REMOVAL.
  2 35    A security freeze remains in effect until the consumer
  3  1 requests that the security freeze be removed.  A consumer
  3  2 reporting agency shall remove a security freeze within three
  3  3 business days after receiving a request for removal that
  3  4 includes proper identification of the consumer and the
  3  5 personal identification number or password provided by the
  3  6 consumer reporting agency.
  3  7    Sec. 5.  NEW SECTION.  714F.5  FEES.
  3  8    1.  A consumer reporting agency shall not charge any fee to
  3  9 a consumer who is the victim of identity theft for
  3 10 effectuating a security freeze, temporary suspension, or
  3 11 removal if with the initial security freeze request, the
  3 12 consumer submits a valid copy of the police report,
  3 13 investigative report, or complaint filed with a law
  3 14 enforcement agency concerning the unlawful use of
  3 15 identification information by another person.
  3 16    2.  A consumer reporting agency may charge a reasonable fee
  3 17 in an amount established by the superintendent of banking by
  3 18 rule to a consumer who is not the victim of identity theft for
  3 19 each security freeze or removal, or for reissuing a personal
  3 20 identification number or password if the consumer fails to
  3 21 retain the original number.  The consumer reporting agency may
  3 22 also charge a reasonable fee in an amount established by the
  3 23 superintendent of banking by rule for each temporary
  3 24 suspension of a security freeze.
  3 25    Sec. 6.  NEW SECTION.  714F.6  THIRD PARTIES.
  3 26    If a third party requests a consumer report that is subject
  3 27 to a security freeze, the consumer reporting agency may advise
  3 28 the third party that a security freeze is in effect.  If the
  3 29 consumer does not expressly authorize the third party to have
  3 30 access to the consumer report through a temporary suspension
  3 31 of the security freeze, the third party shall not be given
  3 32 access to the consumer report but may treat a credit
  3 33 application as incomplete.
  3 34    Sec. 7.  NEW SECTION.  714F.7  MISREPRESENTATION OF FACT.
  3 35    A consumer reporting agency may suspend or remove a
  4  1 security freeze upon a material misrepresentation of fact by
  4  2 the consumer.  However, the consumer reporting agency shall
  4  3 notify the consumer in writing prior to suspending or removing
  4  4 the security freeze.
  4  5    Sec. 8.  NEW SECTION.  714F.8  EXCEPTIONS.
  4  6    A security freeze shall not apply to the following persons
  4  7 or entities:
  4  8    1.  A person or person's subsidiary, affiliate, agent, or
  4  9 assignee with which the consumer has or prior to assignment
  4 10 had an account, contract, or debtor=creditor relationship for
  4 11 the purposes of reviewing the account or collecting the
  4 12 financial obligation owing for the account, contract, or debt,
  4 13 or extending credit to a consumer with a prior or existing
  4 14 account, contract, or debtor=creditor relationship.
  4 15 "Reviewing the account" includes activities related to account
  4 16 maintenance, monitoring, credit line increases, and account
  4 17 upgrades and enhancements.
  4 18    2.  A subsidiary, affiliate, agent, assignee, or
  4 19 prospective assignee of a person to whom access has been
  4 20 granted under a temporary suspension for purposes of
  4 21 facilitating the extension of credit or another permissible
  4 22 use.
  4 23    3.  A person acting pursuant to a court order, warrant, or
  4 24 subpoena.
  4 25    4.  Child support enforcement officials when investigating
  4 26 a child support case pursuant to Title IV=D or Title XIX of
  4 27 the federal Social Security Act.
  4 28    5.  The department of human services or its agents or
  4 29 assignees acting to investigate fraud under the medical
  4 30 assistance program.
  4 31    6.  The department of revenue or local taxing authorities;
  4 32 or any of their agents or assignees, acting to investigate or
  4 33 collect delinquent taxes or assessments, including interest
  4 34 and penalties and unpaid court orders, or to fulfill any of
  4 35 their other statutory or other responsibilities.
  5  1    7.  A person's use of credit information for prescreening
  5  2 as provided by the federal Fair Credit Reporting Act.
  5  3    8.  A person for the sole purpose of providing a credit
  5  4 file monitoring subscription service to which the consumer has
  5  5 subscribed.
  5  6    9.  A consumer reporting agency for the sole purpose of
  5  7 providing a consumer with a copy of the consumer's consumer
  5  8 report upon the consumer's request.
  5  9    Sec. 9.  NEW SECTION.  714F.9  WRITTEN CONFIRMATION.
  5 10    After a security freeze is in effect, a consumer reporting
  5 11 agency may post a name, date of birth, social security number,
  5 12 or address change in a consumer report provided written
  5 13 confirmation is sent to the consumer within thirty days of
  5 14 posting the change.  For an address change, written
  5 15 confirmation shall be sent to both the new and former
  5 16 addresses.  Written confirmation is not required to correct
  5 17 spelling and typographical errors.
  5 18    Sec. 10.  NEW SECTION.  714F.10  APPLICATION.
  5 19    An entity listed in section 714F.1, subsection 3, paragraph
  5 20 "a", "b", or "c", shall be subject to a security freeze
  5 21 commenced by a consumer reporting agency that obtains
  5 22 information from such entity.
  5 23    Sec. 11.  NEW SECTION.  714F.11  WAIVER VOID.
  5 24    A waiver by a consumer of the provisions of this chapter is
  5 25 contrary to public policy, and is void and unenforceable.
  5 26    Sec. 12.  NEW SECTION.  714F.12  ENFORCEMENT.
  5 27    A person who violates this chapter violates section 714.16,
  5 28 subsection 2, paragraph "a".
  5 29                           EXPLANATION
  5 30    This bill concerns the protection of a person's identity.
  5 31    The bill creates new Code chapter 714F that allows an
  5 32 individual, the consumer, to place a hold on the individual's
  5 33 consumer report to prevent a consumer reporting agency from
  5 34 releasing any information relating to the individual's
  5 35 creditworthiness without first obtaining the individual's
  6  1 express authorization.  This "security freeze" may be
  6  2 temporarily suspended to allow a consumer reporting agency to
  6  3 release a consumer report for a specific time period or to a
  6  4 specific third party.  A security freeze remains in effect
  6  5 until the individual requests its removal.
  6  6    The bill provides that a consumer reporting agency cannot
  6  7 charge any fees to an individual who is the victim of identify
  6  8 theft.  Other individuals may be required to pay a reasonable
  6  9 fee per security freeze or removal, or for reissuing a
  6 10 necessary identification number or password if the individual
  6 11 fails to retain it, and per temporary suspension request, in
  6 12 an amount determined by the superintendent of banking by rule.
  6 13    The bill addresses third parties that seek a consumer
  6 14 report, misrepresentation of a material fact by an individual,
  6 15 and lists exceptions to the security freeze, including a
  6 16 person with a prior debtor=creditor relationship.  The bill
  6 17 provides for changes in the consumer report and makes certain
  6 18 entities also subject to a security freeze.
  6 19    The bill provides that a waiver of the protection offered
  6 20 by the security freeze provision is void and unenforceable.
  6 21    The bill contains an enforcement provision.  A violation is
  6 22 an offense under Code section 714.16, and as such would be
  6 23 subject to enforcement, including injunctive relief and money
  6 24 damages, by the attorney general.
  6 25 LSB 5094YH 82
  6 26 rn/rj/14