Legislature(2007 - 2008)BELTZ 211
03/15/2008 04:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB297|| SB294 | |
| HB65 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 294 | ||
| = | SB 297 | ||
| = | HB 65 | ||
CSHB 65(FIN)-PERSONAL INFORMATION & CONSUMER CREDIT
4:36:47 PM
CHAIR ELLIS announced CSHB 65(FIN) to be up for consideration.
[SCS CSHB 65( ) 25-LS0311\V was before the committee.]
4:39:10 PM
REPRESENTATIVE COGHILL, sponsor of HB 65, said he had nine more
suggested amendments and some of them were legislative policy
calls. He said the $5 charge had already been changed from $10
in Version V. He said $5 is a more reasonable fee for elderly
people and it is in line with what other states charge.
4:41:26 PM
CHAIR ELLIS said that addressed Senator Bunde's question about
other states' cost, but asked how it related to the actual cost
of performing the work.
REPRESENTATIVE COGHILL replied it doesn't relate to the actual
charge; agencies have not quantified it and look upon it as a
transactional fee.
4:42:29 PM
SENATOR BUNDE asked if it's true that the credit reporting
agencies don't have a cost for a credit freeze.
REPRESENTATIVE COGHILL replied that is his understanding. It is
a new area of law throughout the United States.
4:43:15 PM
REPRESENTATIVE COGHILL said the next change he wanted was to
delete "or part of" on page 7, line 6, security freezes and
inserting conforming amendments on page 16, line 18, credit
freeze definitions. He explained that credit reporting agencies
said they would freeze all or nothing of a credit report, not
parts of it.
CHAIR ELLIS asked if he was proposing further amendments to the
proposed CS.
REPRESENTATIVE COGHILL responded basically yes; that changes had
been coming at him pretty fast and were based on comments from
the committee.
4:45:43 PM
CHAIR ELLIS said if the amendments were easily understood, they
could be conceptual amendments.
4:46:24 PM
SENATOR BUNDE said a CS would be a cleaner way to go. There
might be more to it than meets the eye.
CHAIR ELLIS asked Representative Coghill to go through his
changes and another CS could be drafted.
4:47:23 PM
REPRESENTATIVE COGHILL said page 11, line 9, dealt with credit
reports and had the $5 fee. The next suggested change was to
delete "request or collection" and insert "communicate or
otherwise make available to the general public" on page 17,
lines 22 and 24. The Recorders Office thought it was important
to make that information available to the public.
ED SNIFFEN, Assistant Attorney General, Department of Law (DOL),
commented that the reason he wanted to change that language is
because the prohibition on page 16, line 27, says that "a person
may not intentionally communicate or otherwise make available [a
social security number] to the general public". When that
language was put in on page 17, lines 20-26, it was a cut and
paste from section 45.48.410 right below it that related to the
request or collection section. This is only a conforming
amendment to make that exemption track the prohibition in
section 45.48.400. There was no intent to broaden the exemption.
CHAIR ELLIS asked if he had worked with Terry Bannister, the
drafter on this point.
MR. SNIFFEN answered not yet. He just got this CS a half hour
ago and he would be happy to work with her on additional
refinements to that language.
4:50:23 PM
CHAIR ELLIS said he was counting on him to work this out.
REPRESENTATIVE COGHILL said the next three items deal with the
LexisNexis and ChoicePoint issues starting on page 18, line 12,
the request and collection section.
4:51:32 PM
CHAIR ELLIS asked to go back to the "expressly authorized"
language on line 1 and if some reasonable middle language had
been found.
REPRESENTATIVE COGHILL responded that the language he came up
with will fit lower in the section. He explained that the broad
picture is that these folks are regulated under the Gramm-Leach-
Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA). The
"expressly authorized" problem was how to regulate those that
are not regulated under those two acts. So he wanted to leave
"expressly" on the top of the page and put new language in
sections 3 and 4 saying "For an entity regulated by a purpose
authorized by the U.S. Code 68.01-68.27 (the GLBA)". The next
section on page 18, lines 16-18, would deal with the Fair Credit
Reporting Act. Conforming language would be inserted where
needed.
4:53:25 PM
REPRESENTATIVE COGHILL said the GLBA has express authorizations
and the FCRA has permitted uses and this language clashes,
especially when he is trying to have "expressly authorized"
language in the state's statutes which exclude some of the
permitted purposes. He said, "I think this language lets them go
ahead and operate freely under their federal rules and then
helps us to have express authorization for everything outside of
that."
4:54:52 PM
CHAIR ELLIS asked if he wanted to leave the "expressly
authorized" language in the CS and make adjustments further on.
REPRESENTATIVE COGHILL replied that the drafters advised that
new section 3 had to say "for an entity regulated by" and
"purpose authorized by" because that language would allow
business the freedom to operate openly under the two federal
acts.
4:55:45 PM
SENATOR BUNDE asked if this cures LexisNexis' concern about
using "permitted" versus "authorized."
REPRESENTATIVE COGHILL answered that he was not sure it cures
the problem, but he thought this language allowed them the
freedom they want. Industry really doesn't want the state to
regulate this issue at all.
CHAIR ELLIS said this is one of the main rubs and he wanted
testimony on this point in particular and then they would
continue with the sponsor's list.
4:56:27 PM
JON BURTON, ChoicePoint, said he thought the amendment responded
to some of his concerns, but it didn't solve the ongoing problem
of "expressly permitted" versus "permitted or authorized" in the
other exemption. He said he would continue to work with the
sponsor on resolving the issue. These two fixes don't solve all
their problems.
CHAIR ELLIS remarked that the beat goes on with that particular
issue.
JENNIFER FLYNN, Consumer Data Industry Association (CDIA), said
CDIA is the national association that represents the consumer
reporting agencies including LexisNexis and ChoicePoint. She
agreed with Mr. Burton that they had come a long way with the
sponsor to alleviate their concerns. However, there are still
problems with the "expressly authorized" language. She said she
would bring this language to her members and lawyers and
continue to work with Representative Coghill's office.
4:59:23 PM
CHAIR ELLIS said the expressly authorized language wouldn't get
resolved before sending this to the Judiciary Committee.
AUDREY ROBINSON, Reed Elsevier, parent company of LexisNexis,
stated the "expressly authorized" and "permitted purpose"
language really is the rub for her company. The entire reason
they don't want to use that language is because the FCRA
specifically uses "permitted purpose" language. So using
"expressly authorized" doesn't really work in the new amendment,
but she said she would run it by her attorneys.
5:01:25 PM
GAIL HILLEBRAND, Consumers' Union, said the amendments being
offered today take away the "expressly authorized" requirement
for the two statutes most closely identified with this industry,
GLBA and FCRA. She said that federal law doesn't restrict in any
comprehensive way the sale, lease, disclosure or collection of
social security numbers. If it did, this bill wouldn't be
needed. Federal law takes a specific approach rather than
looking at the whole problem and says that anything is okay
because it likes the marketplace as it is.
She stressed that today's amendments make a big change,
particularly with respect to sale, loan, lease, trade and
rental. The bill will work, but it is a substantial step back
from where it was when it first came to the committee. Something
useful about the amendments is that federal laws do not address
everybody who touches a social security number and the way these
amendments have been crafted, only those folks who are under the
federal law will get some kind of exemption in state law.
5:03:22 PM
REPRESENTATIVE COGHILL commented that the folks who want to be
out from under "expressly authorized" generally speaking are
under federal law. Those who are not regulated need to have, in
his view, the law pushing at them if they are going to buy,
steal or request collection of social security numbers. He
wanted them to be regulated by state law, but he didn't want to
be crossways with federal law. So he would continue to work with
them.
REPRESENTATIVE COGHILL went back to Article 1 on page 3, line
11, breach of security and notification, and said this language
would be an answer to Yahoo's question. He explained that Yahoo
and ChoicePoint were concerned about not providing for
electronic notification; so if a business is not in the normal
habit of keeping a database of addresses and only has email
addresses available to them, then they can notify by email.
5:05:24 PM
CHAIR ELLIS asked if this addresses Yahoo's written concern.
REPRESENTATIVE COGHILL answered yes. He went on to page 9, lines
4-14, that give insurance companies more than enough ways to
deal with a consumer who has come to them for access during a
security freeze. It was narrowly crafted on purpose and he
didn't think they liked that. But if people are going to correct
their credit, this is the new world. It is a policy call.
CHAIR ELLIS asked Ms. Flynn if she wanted to comment on that
point.
5:06:46 PM
MS. FLYNN responded that credit reporting agencies recognize
that 33 states do have an insurance exemption for the credit
freeze, but each state makes its own policy decision on it.
REPRESENTATIVE COGHILL said the next concern was regarding
printing a social security number on a student transcript. On
page 20, line 2, subparagraph (5) on disclosures says the
prohibition doesn't apply if the disclosure is for a background
check on an individual, debt collection, identity or
verification. He couldn't think of any other reason to have a
social security number on a transcript other than for identity
verification. For any other use, he would be suspicious.
The other concern was on page 15, line 18 - reports of credit
freezes. Under subparagraph (10) the suggestion was to delete
"consumer reporting agency" and insert "a person if the database
or file". This is a word fix that was needed for conformity with
following language that talks about "a person."
5:10:24 PM
REPRESENTATIVE COGHILL said this bill is a compromise with
industry, but he is trying to push a consumer policy call with
the legislature and the reason this is so important is once
somebody has their identity taken from them, they have to prove
themselves innocent. They are actually responsible for the cost
of someone else's failure. Even going before a court of law,
they won't easily get their name back.
5:11:48 PM
CHAIR ELLIS noted that not everyone was satisfied, so he held
CSHB 65(FIN) for more work. There being no further business to
come before the committee, he adjourned the meeting at 5:13:40
PM.
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