Legislature(2003 - 2004)
02/20/2003 01:33 PM Senate L&C
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ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 20, 2003
1:33 p.m.
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Gary Stevens
Senator Bettye Davis
Senator Hollis French
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 64
"An Act requiring certain consumer reporting agencies to provide
individuals with certain information without charge."
HEARD AND HELD
PREVIOUS ACTION
SB 64 - No previous action to consider.
WITNESS REGISTER
Mr. Steven Cleary, Executive Director
Alaska Public Information Group (AKPIRG)
PO Box 101093
Anchorage AK 99510
POSITION STATEMENT: Supported SB 64.
Mr. Ed Sniffen
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on SB 64.
ACTION NARRATIVE
TAPE 03-5, SIDE A
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:33 p.m. Present were Senators
Ralph Seekins, Gary Stevens, Bettye Davis, Hollis French and
Chair Con Bunde.
SB 64-CREDIT INFORMATION
CHAIR CON BUNDE announced SB 64 to be up for consideration.
SENATOR HOLLIS FRENCH, sponsor of SB 64, said this is consumer
protection legislation. It is designed to allow Alaskans annual
access to his or her consumer report from any consumer reporting
agency that does business in the state. There are only three
nationwide consumer reporting agencies that compete with each
other. Many people have no experience getting consumer reports
and, for some, the $9 cost is an issue. Six or seven states have
enacted similar legislation. He said there is no hidden agenda
behind SB 64 and it is easy to understand.
SENATOR FRENCH referred to an article from CNN about a recent
theft of credit card numbers from a mail order catalogue
company. It said that as many as 8 million account numbers were
accessed. At least one company cancelled 8,000 credit cards in
response to the theft.
CHAIR BUNDE asked how many folks he thought would take advantage
of this if it was available to them.
SENATOR FRENCH replied that currently 1 in 10 people access
their credit reports nationwide. He noted, "I would be surprised
if this would double the number of folks who were to access
their credit reports..."
CHAIR BUNDE asked what financial impact this legislation would
have on the credit card companies.
SENATOR FRENCH answered that no one knows, but he thought it
might actually be beneficial.
CHAIR BUNDE noted that any cost for the credit check would be
passed on to the consumer. He asked Senator French if he had
considered the impact this bill might have on the $9 charge if
this service were free.
SENATOR FRENCH said that is a good question that he has referred
to credit companies, but they hadn't responded so far. He
stressed that this is information that ultimately belongs to the
consumer.
SENATOR BETTYE DAVIS remarked that this might help consumers
because now they have to pay a fee to get a credit report
through credit card companies.
SENATOR GARY STEVENS asked if the three companies provide this
information to the consumer in hard copy only or whether it is
available over the Internet.
SENATOR FRENCH replied that he went on the Internet two days ago
and paid $30 to have all three reporting agencies give him his
credit report in a single document. He got a password and was
able to access the report one time. He printed it out and has a
copy.
SENATOR GARY STEVENS remarked that fraud might be even more
pervasive if the reports were available on the Internet.
SENATOR SEEKINS asked if information about a particular
consumer's financial transactions is considered to be that
person's property.
SENATOR FRENCH replied that at some level it belongs to the
consumer at least once because it is the consumer's transaction.
SENATOR SEEKINS asked if a consumer would benefit from having
recorded transactions in a credit collecting and reporting
agency and if they weren't selling that information by allowing
it to be collected.
SENATOR FRENCH replied that he didn't dispute the value of the
service credit reporting companies provide, but the
countervailing value is openness, access and accuracy.
SENATOR SEEKINS said that based on his own experience, if he
knows a person's social security number, he can get that
person's credit history. He wanted to know from the credit card
companies their estimate of the added cost of a free report that
would be spread out among existing customers. He asked how many
people in the room have checked to see if someone had stolen
their identity. [Two people indicated they had.]
SENATOR FRENCH responded that he had at least one inquiry from a
consumer protection group in Washington D.C. asking how this
bill was proceeding and he hadn't notified them. He thought
there must be a way to monitor bills that are filed and that the
credit reporting agencies have not responded because they have
not heard about the bill yet, not because they do not care.
SENATOR SEEKINS asked which states currently have similar
legislation and whether they have experiences to relate.
1:50 p.m.
SENATOR FRENCH replied he is aware that Colorado, Georgia,
Maryland, Massachusetts, New Jersey and Vermont have similar
legislation.
CHAIR BUNDE said it would be interesting to see if the number of
inquiries increased in those states and whether the cost of
reports beyond the free one increased.
MR. STEVE CLEARY, Executive Director of the Alaska Public
Interest Research Group, said this bill benefits both consumers
and companies because fraud costs everybody money. He
maintained, "It's not just people who have their identity
stolen...but it's also the credit bureaus and credit agencies
that have to deal with identity theft...." He noted that the
access provided by this bill does not put an undue burden on
businesses.
He noted that this bill is directed toward identity theft, but
credit scores are often used to deny folks credit or to
discriminate against them in other venues such as insurance and
they need to be looked at, as well, in other legislation.
SENATOR GARY STEVENS asked if this bill would actually lead to
less fraud or whether it would simply identify fraud after it
has occurred.
MR. CLEARY replied he hopes it will lead to less fraud, although
people will pick up on problems after the fact. It recognizes
the increasing threat of identity theft that people should be
aware of.
SENATOR SEEKINS asked Mr. Cleary why he would say that a record
of his transactions belongs to him.
MR. CLEARY replied that a person's credit history blends into
their future credit and it can be used as a device that
determines a lot of future actions. If people are going to make
decisions based on a person's transactions, that person should
have access to that same information for full disclosure. He
added this bill could protect a consumer from credit errors,
which are very common. Sometimes just a misspelling of a name
can lead to credit complications.
SENATOR SEEKINS asked how people would become aware of this law
if it passed.
MR. CLEARY replied people who had been formally denied credit
through a credit card application process could find out on
their letter of denial. He thought word of mouth might also help
or it could be printed on the Permanent Fund application.
SENATOR SEEKINS said he would not want the consumer protection
section of the Attorney General's office to have to put out a
business advisory for notification.
MR. ED SNIFFEN, Department of Law, said the department had to do
that once.
CHAIR BUNDE asked Mr. Cleary if he was aware of anyone who was
not getting a credit report because of the cost.
MR. CLEARY replied that he hadn't heard that. There are
provisions for consumers who are receiving welfare or
unemployment to receive free credit reports, but this bill lends
itself to routine maintenance through more awareness. He noted,
"Nine dollars isn't all that much, but this bill would save
industry money as well, so I think that cost is well spent."
CHAIR BUNDE thanked him for his testimony and said he was
looking forward to getting more information on this issue and
held SB 64 in committee.
CHAIR BUNDE adjourned the meeting at 2:05 p.m.
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