Legislature(2017 - 2018)BELTZ 105 (TSBldg)
03/28/2017 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings | |
| HB48 | |
| SB93 | |
| SB38 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 48 | TELECONFERENCED | |
| *+ | SB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 93 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
SB 93-CREDIT REPORT SECURITY FREEZE
2:11:30 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 93. She stated that intent is to hear the
introduction, take questions and public testimony, and hold the
bill for further consideration.
2:11:48 PM
RYNNIEVA MOSS, Staff, Senator John Coghill, Alaska State
Legislature, explained that SB 93 supplements Senate Bill 121
that passed last year. It establishes a process for setting up
security freezes for minors who are [16] years of age and
younger that mirrors the process that 26 other states have
adopted.
She presented SB 93 speaking to the following PowerPoint:
Sec. 1
Who is a protected consumer?
A person who is an incapacitated person or under 16
years of age.
Definition of incapacitated person
An incapacitated person is 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.
Why Sixteen?
Consumers at 16 years of age typically begin working,
own a cell phone, have a bank account, and have
established active credit. 26 other states have
reduced the age from 18 to 16.
A credit freeze for a minor and a credit freeze for an
adult, while similar in name, in practice they operate
in very different ways.
A credit freeze for an adult is placed to
temporarily turn off the availability of already
established credit for that individual. The request
for a freeze could be due to a recent identity theft
or for other purposes. Because a credit report was
previously created by a lending agency and therefore
currently exists for an adult, one can turn on and
off their credit by placing a freeze.
In the case of a minor, a credit report should not
exist for a person under the age of 16. Therefore,
in order to place a freeze, a credit reporting
agency must (1) verify and authenticate the
identities of both the minor and the requester, (2)
verify the relationship of the person requesting the
freeze for the minor, and (3) create a new record
(prohibiting a credit report from being created in
the future for the minor)
Sec. 2
Creates Article 2A. Security Freeze for Protected
Consumers
Article 2A sets up a system in state statute for
placement of and removal of a security freeze for
minors and incapacitated consumers. The bill puts in
place requirements for identification of parties
involved, verification of authority of personal
representatives, accessing the record by the
representative or other entities with legal purpose,
and the lifting of a security freeze.
2:16:28 PM
Placement of a Security Freeze
AS 45.48.300 - A consumer credit reporting agency is
mandated to place a freeze on a protected consumer's
report if:
A protected consumer's representative requests one.
The protected consumer's representative
Submits the request in a manner specified by the
agency
Submits proof of identification of the protected
consumer
Submits proof of identification of the
representative and proof of authority
Pays the fee of not more than $5.00
Creation of a Record for a Protected Consumer
AS 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.
Proof of Identification and Authority
AS 45.48.320 - Proof of Identification
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
the 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
Time of Placement of Security Freeze
AS 45.48.330 - Placement of Freeze
The agency must place a freeze on the credit report
of record no later than 30 days after receiving the
request.
Operation of Security Freeze
AS 45.48.340 - Operation of 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 from
the representative.
Duration of Security Freeze
AS 45.48.350 - Duration of 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
a misrepresentation of facts.
Effect of Material Misrepresentation of Fact
AS 45.48.370 - Material Misrepresentation of Fact
The agency may remove a security freeze or delete
the record if the security freeze was obtained using
a material misrepresentation of fact.
Removal of Security Freeze
AS 45.48.360 - Removal of Security Freeze.
(a) The protected consumer or his representative can have a
freeze removed by:
Submitting a request in the manner prescribed by the
agency
Providing sufficient proof of:
Identification of protected consumer
Identification of representative
Authority for the representative
Paying the agency a fee of not more than $5.00
(b) The agency has not more than 30 days to remove the
freeze.
Charges
AS 45.48.380 - Charges.
A consumer credit reporting agency may not charge
more than $5.00
The agency may 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
2:18:36 PM
Exemptions
AS 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
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
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
Exemptions (continued)
AS 45.48.390 - Exemptions. Under the following
conditions a frozen report of a protected consumer
will be made available to the requestor:
If the report of the agency consists entirely of
information used solely for one or more of the
following:
Criminal records information
information
Fraud prevention or detection
Tenant screening
Employment screening
Definitions
AS 45.48.395 - Definitions
"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 to
furnishing credit reports to third parties, but does
not include a person who issues the report.
2:19:19 PM
Sec. 3 - Transition
This transition language 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.
SENATOR MEYER commented that age 16 as opposed to age 18 can be
discussed as a policy call. He asked if all the provisions that
passed last year remain the same, but that this bill is directed
at minors and incapacitated people.
MS. MOSS said that's correct.
SENATOR GARDNER asked if adolescents would need to go through
the process of removing a freeze placed by their parents once
they reach age 16.
MS. MOSS said she believes they would be allowed to remove the
freeze once they turn 16. She deferred further comment to
invited expert testimony.
2:21:47 PM
CHAIR COSTELLO opened public testimony on SB 93.
2:21:59 PM
ERIC ELLMAN, Consumer Data Industry Association (CDIA),
Washington, D.C., stated that CDIA represents over 100 consumer
reporting agencies including the three major credit bureaus.
They have worked with legislators in 26 other states to
establish minor credit freezes and SB 93 will make Alaska law
consistent with those states.
Addressing the question regarding age 16 versus age 18, he
explained that all the minor credit freeze statutes that have
passed apply to individuals below 16 years-of-age. The reasoning
is that 16-year-olds get jobs and are essentially credit active
consumers. That is why CDIA is asking that SB 93 follow what
other states have done and adopt age 16. Responding to Senator
Gardner's question, he explained that once the minor turns 16
he/she can affirmatively request the credit bureau remove the
freeze.
2:25:10 PM
SENATOR MEYER continued to question the age 16 provision and
pointed out that a parent or guardian is legally responsible for
their child or ward.
MR. ELLMAN argued that those in the credit reporting community,
the banking and financial services community, and schools
encourage the pursuit of credit education for youngsters. He
agreed that a parent or guardian might need to step in if a
minor fails financially, but maintained it is not appropriate to
address that through a minor freeze. The goal in establishing
age 16 as the threshold is to protect individuals who should not
be credit active. Once they reach the age of 16 many consumers
will become credit active and we want to meet their needs and
their parents' needs, he said.
SENATOR MEYER questioned the notion of encouraging his 17-year-
old to be credit active. He observed that she could get a job,
but she could not get a credit card or a bank loan on her own.
MR. ELLMAN reminded members that the goal of the minor freeze is
to prevent commerce from occurring, whereas the goal of the
adult freeze is to allow adult consumers to turn their credit on
and off as needed.
CHAIR COSTELLO asked if there is a way to communicate with a
minor's parent if someone steals a minor's identity and there is
a freeze on their credit.
MR. ELLMAN said yes. He explained that 99 percent or more of
minors under age 16 do not and should not have a credit report.
If they do, it is most certainly due to fraud and the bill will
allow a parent or guardian to lock down the minor's credit
history. Procedures are also in place to allow the parent or
guardian to monitor activity on the credit report.
2:31:41 PM
CARLIE CHRISTENSEN, Director of Government Relations, Equifax,
Atlanta, Georgia, testified in support of SB 93. She agreed with
previous testimony that SB 93 would amend Alaska law to bring it
in line with minor freeze laws in other states. It specifies the
way a protected consumer's representative must place a request
to place or remove a security freeze. It also clarifies what
constitutes sufficient proof of identification for the
representative to act on behalf of the protected consumer. She
also stated support for the bill covering minors 16 years of age
and younger.
SENATOR GARDNER asked if she's aware of any dueling parents who
have placed a credit freeze on a minor's record.
MS. CHRISTENSEN said she isn't aware of any specific instance,
but the company likely has an established procedure to deal with
that circumstance.
CHAIR COSTELLO asked Mr. Ellman to respond to the question.
MR. ELLMAN said he suspects that there would be times when it
might be necessary to arbitrate between dueling parents. He
offered to do some research and provide a more definitive
answer.
SENATOR GARDNER commented that this could be both a bug and a
feature.
2:36:20 PM
CHAIR COSTELLO closed public testimony on SB 93 and held the
bill in committee.