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.