Legislature(2017 - 2018)GRUENBERG 120
03/28/2018 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| SB93 | |
| HB367 | |
| HB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 93 | TELECONFERENCED | |
| + | HB 367 | TELECONFERENCED | |
| += | HB 75 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 93-CREDIT REPORT SECURITY FREEZE
1:41:48 PM
CHAIR CLAMAN announced that the next order of business would be
SENATE BILL NO. 93, "An Act relating to security freezes on the
credit reports or records of incapacitated persons and certain
minors."
1:42:39 PM
RYNNIEVA MOSS, Staff, Senator John Coghill, Alaska State
Legislature, advised that SB 121 [passed in the Twenty-Ninth
Alaska State Legislature] was enacted into law [9/17/16] and it
provided a subsection in existing statutes for security freezes
for minors. Although, she explained, the legislation did not
set up a process for creating a security freeze, hence SB 93
creates that system. Ms. Moss paraphrased the sectional
analysis as follows [original punctuation provided]:
Section 1. Distinguishes difference between security
freezes for adults and security freezes for a
"protected customer" AND Defines a "protected
customer" as a person who is incapacitated or under 16
years of age.
1:43:37 PM
MS. MOSS explained that an incapacitated person is a person who
is unable to receive and evaluate information and communicate
decisions, and they need assistance from someone, usually with a
court order, such as a legal guardian or legal representative.
MS. MOSS offered that the age of 16 was chosen because Senate
Bill 121 covered minors up to the age of 18 years. However, 26
other states have reduced the age to 16 with the rationale that
consumers at the age of 16 years typically begin working, own a
cell phone, have a bank account and; therefore, they have
established some type of credit.
MS. MOSS advised that Sec. 2 is the meat of the bill which
creates a system for security freeze for protected consumers.
She noted that a credit freeze for a minor and an adult, while
similar in name, in practice operate in very different manners.
A credit freeze for an adult is placed to temporarily turn off
the availability of an already established credit for that
individual. The request could be due to identity theft and
because a credit report was previously created by a lending
agency, the credit report simply needs to be frozen and the
process is immediate, she explained.
1:45:12 PM
MS. MOSS continued paraphrasing the sectional analysis as
follows:
Sec. 2. Creates Article 2A (Security Freeze for
Protected Consumer)
*45.48.300. Placement of security freeze. A consumer
credit reporting agency is mandated to place a freeze
on a protected consumer's report if:
(1) A protected consumer's representative
requests one.
(2) The protected consumer's representative
(a) Submits the request in a manner
specified by the agency
(b) Submits proof of identification of the
protected consumer
(c) Submits proof of identification of the
representative and proof of authority
(d) Pay the fee of not more than $5.00.
*45.48.310. Record. If a protected consumer does not
have a credit report with the agency, the agency will
create a record for the protected consumer and place a
freeze on it.
*45.48.320. Proof of identification and authority.
Proof of identification includes:
Social security number or copy of SS card
Certified or official birth certificate
A driver's license or identification card issued
by Division of Motor Vehicles
Other identification issued by a government
agency
Proof of authority Includes:
A court order
A written, notarized statement expressly
describing the authority that the representative has
signed.
*45.48.330. Time of Placement of security freeze. The
agency shall place the freeze on the credit report or
record no later than 30 days after receiving the
request.
*45.48.340. Operation of security freeze. Once a
freeze is placed on the report or record, the agency
cannot release information about the record without
permission from the representative or consumer unless
the freeze was placed based on misrepresentation of
fact or the agency has received a request for removal
of the security freeze.
*45.48.350. Duration of security freeze. A security
freeze remains in effect until
the representative requests the freeze be removed or
if the agency determines the freeze
occurred because of misrepresentation of facts.
*45.48.360. Removal of security freeze.
(a) The protected consumer or his or her
representative can have a freeze removed by:
(1) Submitting a request in the manner
prescribed by the agency
(2) Providing sufficient proof of:
(a) ID of protected consumer
(b) ID of representative
(c) authority for the representative
(3) Pay the agency a fee of not more than
$5.00
(b) The agency has not more than 30 days to
remove the freeze
*45.48.370. Effect of material misrepresentation of
fact. The agency may remove a security freeze or
delete the record is the security freeze was obtained
using a material misrepresentation of fact.
*45.48.380. Charges.
(1) A consumer credit reporting agency may not
charge a fee more than $5.00
(b) The agency has not more than 30 days to
remove the freeze
*45.48.370. Effect of material misrepresentation of
fact. The agency may remove a security freeze or
delete the record is the security freeze was obtained
using a material misrepresentation of fact.
*45.48.380. Charges.
(1) A consumer credit reporting agency may not
charge a fee more than $5.00
(2) The agency may not (shall not) charge a fee
when:
the protected consumer's representative submits a
police report, investigative report of complaint
involving criminal impersonation in the 1st degree
the protected consumer is under the age of 16 and
the agency has created a credit record for that
consumer
*45.48.390. Exemptions. Under the following conditions
a frozen report of a protected consumer will be made
available to the requestor:
a person with a court order, warrant, or subpoena
a government agency establishing and enforcing
child support orders
Dept. of Health & Social Services and its agents
in investigating fraud
Dept. of Revenue and its agents when
investigating or collecting delinquent taxes, unpaid
court orders, or other statutory responsibilities
a credit file monitoring service the protected
consumer is a subscriber to
the protected consumer or representative has
requested a report
if the report of the agency consists entirely of
information used solely for one or more of the
following:
Criminal records information
Personal loss information
Fraud prevention or detection
Tenant screening
Employment screening
A person preparing a credit report for an
inquiring bank or financial institution regarding
account closures because of fraud, substantial
overdrafts, automated teller machine abuse, or similar
information regarding a protected consumer
*45.48.395. Definitions.
"consumer" an individual who is the subject of a
credit report or credit score.
consumer credit reporting agency" - a person who, for
monetary fees, dues, or on a cooperative nonprofit
basis, regularly engages, in whole or part, in the
practice of assembling or evaluating consumer credit
information or other information on consumers for the
purpose of furnishing credit reports to third parties,
but does not include a person who issues reports.
incapacitated person" - means a person whose ability
to receive and evaluate information or to communicate
decisions is impaired to the extent that the person
lacks the ability to provide or arrange for the
essential requirements for the person's physical
health or safety without court-ordered assistance.
"proof of authority and identification" - proof of
authority and identification required for a protected
consumer's representative by the credit reporting
agency to place a security freeze on the credit record
or report.
"protected consumer" - a person who is an
incapacitated person or under 16 years of age.
"record" - the record credit in AS 45.48.310, a record
created by the agency and frozen.
"representative" - a person who has authority to act
on behalf of a protected consumer.
"security freeze" - the restriction on access to a
protected consumer's credit report or record.
Sec. 3. Transition.
This provision provides that security freezes put
in place prior to the effective date of this Act, will
remain enforced under the same statutes as they did
when the freeze was placed on the record.
1:50:16 PM
MS. MOSS explained that every year in the United States, 1.3
million children's identities are stolen, and 50 percent of
those children are under the age of six years. Thieves can
obtain social security numbers in numerous ways wherein 26 other
states recognized that something must be done, and this
legislation is Alaska's attempt to protect children and their
parents from identity theft and fraud, she offered.
1:51:02 PM
REPRESENTATIVE LEDOUX noted that if there was no credit report
in the first place, how is a freeze established on something
that does not exist.
MS. MOSS answered that this legislation creates a process
whereby a parent can ask a credit reporting agency to create a
credit report (indisc.). The reason being, she explained, if
there is no credit report and no freeze, there is no way to know
that someone had taken another person's social security number
to have credit cards, loans, or other indebtedness in that
person's name.
REPRESENTATIVE LEDOUX surmised, "If there is no credit report."
MS. MOSS answered in the affirmative.
1:52:08 PM
REPRESENTATIVE LEDOUX asked what happens logistically when a
credit report is frozen and someone tries to obtain a credit
card in the name of the person with a frozen credit report, and
whether all sorts of lights and whistles go off.
MS. MOSS answered that that action sends a signal to the credit
card company that a freeze is on this credit report. The credit
companies probably read between the lines that someone is
applying for a credit card in other person's name and social
security number.
1:52:54 PM
REPRESENTATIVE EASTMAN offered a scenario where a father with a
two-year old son filed for this credit report and froze his
son's credit report. Except, the father forgot about it and
when his son is 17 years of age, he [applies for credit] and all
of the bells and whistles apply because the father forgot to
inform his son of the credit freeze. He asked, in that
scenario, whether it would make it harder for the son to "go
about the normal things that 17 years olds do?"
MS. MOSS answered that the son was above the age of 16 years, so
he has authority to lift the credit report freeze.
1:53:34 PM
REPRESENTATIVE EASTMAN offered the same scenario, except he
changed it from a 17-year-old to a 15-year-old son.
MS. MOSS responded that with the approval of his parents, he
could lift the credit report freeze. In the event of a family
squabble, the son could apply to be emancipated, she opined.
1:54:05 PM
REPRESENTATIVE LEDOUX asked whether there is language in the
bill that allows emancipated minors to either freeze or lift the
credit report freeze.
MS. MOSS explained that an emancipated person is considered an
adult.
1:54:52 PM
The committee took an at-ease from 1:54 p.m. to 1:55 p.m.
1:55:13 PM
MS. MOSS continued her response to Representative LeDoux that
once a person is considered an emancipated adult, he/she goes by
the provisions of state law that address credit freezes for
adults. She then referred the committee to AS [45.]48.100
through 45.48.210.
1:55:38 PM
REPRESENTATIVE LEDOUX referred to [Section 1. Sec.
45.48.380(b)(2)(A)], page 5, line 9, which read as follows:
(A) the protected consumer is under 16
years of age; and
REPRESENTATIVE LEDOUX offered that rather than an adult with the
definition of adult, the above cite does not appear to address
the emancipated minor.
1:56:11 PM
CHAIR CLAMAN noted that the credit agencies are busy collecting
people's data from all kinds of different sources, and in the
event a person decides they do not like that data collection,
adults can send out this notice advising credit agencies to put
a freeze on their credit history, and the credit card companies
can no longer research that person's credit. In theory, he
said, those companies are collecting data on minors even though
"we wished they weren't," and this bill essentially gives
individuals and families the option of advising that they want
to protect their child and put a freeze on their credit. This
information basically advises credit agencies that their child
is a minor and to not collect information. The purpose of this
legislation is to primarily give families and parents the
ability to protect their youth or someone who is disabled, he
said.
MS. MOSS replied that Chair Claman was correct, and explained
that once a person is emancipated, they are no longer defined as
a protected consumer, they are an adult.
1:57:38 PM
REPRESENTATIVE EASTMAN asked how the bill handles the
potentially delicate situation where the mother or father do not
agree to the freeze at the time of the two-year old son's
scenario, or one parent wants to unfreeze their child's credit
report
MS. MOSS answered that there probably is not a clear answer, it
may end up with a judge making that decision in a child support
order.
CHAIR CLAMAN noted that in cases where the one parent freezes
their child's credit on one day and pays the $5.00 fee, and the
next day the other parent unfreezes the child's credit and pays
the $5.00 fee. He suggested that if these actions occurred
often enough, there may be a point in which the $5.00 fee would
cause them to try to find a compromise.
1:58:46 PM
CHAIR CLAMAN opened public testimony on SB 93. After
ascertaining no one wished to testify, closed public testimony
on SB 93.
[SB 93 was held over.]