January 30, 2007, Introduced by Reps. Caul, Opsommer, Hansen, Booher, Nitz, Amos, Moore, Pearce, Proos, Marleau, Green, Stakoe, Emmons, Moolenaar, LaJoy and Meekhof and referred to the Committee on Banking and Financial Services.
A bill to require certain consumer reporting agencies to place
security freezes on certain consumer credit information; to
authorize and limit fees; and to provide remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"consumer credit protection act".
Sec. 3. As used in this act:
(a) "Clear and proper identification" means information
generally deemed sufficient to identify an individual.
(b) "Consumer" means an individual who resides in this state.
(c) "Consumer report" means that term as defined in 15 USC
1681a(d).
(d) "Consumer reporting agency" means that term as defined in
15 USC 1681a(f). The term does not include a check acceptance
service that provides check approval and guarantee services to
merchants.
(e) "Security freeze" means a notice placed on a consumer
report at the request of the consumer that prohibits a consumer
reporting agency from releasing the consumer's consumer report or
credit score related to extensions of credit without the express
authorization of the consumer except in compliance with this act.
Sec. 5. (1) A consumer may place a security freeze on his or
her consumer report by making a written request to a consumer
reporting agency, sent by certified mail to an address designated
by that consumer reporting agency to receive requests under this
subsection, that includes clear and proper identification of the
consumer. A consumer reporting agency shall place a security freeze
on a consumer's consumer report within 10 business days after
receiving a written request for the security freeze from the
consumer under this subsection.
(2) If a security freeze is in place, a consumer reporting
agency shall not release information from a consumer report to a
third party without prior express authorization from the consumer.
This subsection does not prevent a consumer reporting agency from
advising a third party that a security freeze is in effect with
respect to the consumer's consumer report.
Sec. 7. (1) Within 10 business days after a consumer reporting
agency receives a request for a security freeze under section 5,
the consumer reporting agency shall provide the consumer with a
unique personal identification number or password that the consumer
may use to provide authorization for access to his or her consumer
report for a specific period of time. In addition, the consumer
reporting agency shall simultaneously provide to the consumer in
writing the process for placing, removing, and temporarily lifting
a security freeze and the process for allowing access to
information from the consumer report while the security freeze is
in effect.
(2) A consumer may request in writing a replacement personal
identification number or password for purposes of subsection (1).
The request must comply with the requirements for requesting a
security freeze under section 5. Within 10 business days after a
consumer reporting agency receives a request for a replacement
personal identification number or password, the consumer reporting
agency shall provide the consumer with a new, unique personal
identification number or password to be used by the consumer
instead of the number or password that was provided under
subsection (1).
Sec. 9. If a security freeze is in effect, a consumer
reporting agency shall not change a consumer's name, address, date
of birth, or social security number in a consumer report without
sending a written confirmation of the change to the consumer within
30 days after the posting of the change to the consumer report. If
the change is an address change, the consumer reporting agency
shall send written confirmation to both the new address and the
former address. Written confirmation is not required for a
technical modification of information in a consumer report,
including name and street abbreviations, complete spellings, or
transposition of numbers or letters.
Sec. 11. (1) A consumer reporting agency shall remove or
temporarily lift a security freeze placed on a consumer report only
if 1 of the following applies:
(a) The consumer makes a request under this section and pays
any applicable fees under section 13 to the consumer reporting
agency at a point of contact designated by that consumer reporting
agency.
(b) The consumer report is frozen due to a material
misrepresentation of fact by the consumer. If a consumer reporting
agency intends to remove a security freeze on a consumer report
under this subdivision, the consumer reporting agency shall notify
the consumer in writing before removing the security freeze.
(2) If a consumer wishes to allow access to his or her
consumer report for a specific period of time while a security
freeze is in place, he or she shall contact the consumer reporting
agency and request that the consumer reporting agency temporarily
lift the security freeze and provide all of the following to the
consumer reporting agency:
(a) Clear and proper identification.
(b) The unique personal identification number or password
provided by the consumer reporting agency under section 5.
(c) The specific time period that the consumer requests that
the consumer reporting agency allow users access to his or her
consumer report.
(3) A consumer reporting agency that receives a request from a
consumer to temporarily lift a security freeze on his or her
consumer report under subsection (2) shall comply with the request
within 3 business days after receiving the request. A consumer
reporting agency may develop procedures involving the use of
telephone, facsimile, the internet, or other electronic media to
receive and process a request from a consumer to temporarily lift a
security freeze on a consumer report in an expedited manner.
(4) A security freeze shall remain in place until the consumer
requests that the consumer reporting agency remove the security
freeze. A consumer reporting agency shall remove a security freeze
within 3 business days after receiving a request for removal from
the consumer and the all of the following information from the
consumer:
(a) Clear and proper identification.
(b) The unique personal identification number or password
provided by the consumer reporting agency under section 7.
Sec. 13. (1) Subject to subsection (2), a consumer reporting
agency may impose a reasonable fee on a consumer for placing,
temporarily lifting, or removing a security freeze on a consumer
report. The amount of the fee may not exceed $10.00 per request.
(2) A consumer reporting agency may not charge any of the
following consumers a fee for placing or removing a security freeze
on a consumer report:
(a) A consumer who was a victim of identity theft and who
provides the consumer reporting agency upon request with a police
report that confirms that the consumer was a victim of identity
theft.
(b) A consumer who is 65 years old or older.
Sec. 15. (1) A consumer may bring an action against a person
who negligently fails to comply with any requirement imposed under
this act with respect to the consumer to recover actual damages
sustained by the consumer as a result of the failure, plus
reasonable attorney fees and court costs.
(2) A consumer may bring an action against a person who
willfully fails to comply with any requirement imposed under this
act with respect to the consumer to recover actual damages
sustained by the consumer as a result of the failure or damages of
not less than $100.00 and not more than $1,000.00, whichever is
greater, plus reasonable attorney fees and court costs if the
consumer is successful in obtaining any award in the action.
(3) A consumer reporting agency may bring an action against a
person who obtains a consumer report or requests a security freeze,
the temporary lift of a freeze, or the removal of a freeze from the
consumer reporting agency under false pretenses or in an attempt to
violate federal or state law to recover actual damages sustained by
the consumer reporting agency or $1,000.00, whichever is greater.
(4) If the court in an action described in this section finds
that an unsuccessful pleading, motion, or other paper filed in
connection with the action was filed in bad faith or for purposes
of harassment, the court shall award attorney fees to the
prevailing party in an amount the court finds reasonable in
relation to the work expended in responding to the pleading,
motion, or paper.
Sec. 17. The following entities are not required to place a
security freeze on a consumer report:
(a) A consumer reporting agency that acts only as a reseller
of credit information by assembling and merging information
contained in the database of another consumer reporting agency or
multiple consumer reporting agencies and does not maintain a
permanent database of credit information from which new consumer
reports are produced. However, a consumer reporting agency acting
as a reseller shall honor any security freeze placed on a consumer
credit report by another consumer reporting agency.
(b) A check services or fraud prevention services company that
issues reports on incidents of fraud or authorizations for the
purpose of approving or processing negotiable instruments,
electronic funds transfers, or similar methods of payments.
(c) A deposit account information service company that issues
reports regarding account closures due to fraud, substantial
overdrafts, automatic teller machine abuse, or similar negative
information regarding a consumer to inquiring financial
institutions for use only in reviewing a consumer request for a
deposit account at the inquiring financial institution.
Sec. 19. (1) This act does not apply to the use of a consumer
report by any of the following:
(a) If the consumer report is used for the purpose of
reviewing the account or collecting the financial obligation owing
for the account, contract, or negotiable instrument, a person with
which a consumer has or had prior to assignment an account or
contract or to which the consumer has issued a negotiable
instrument; a subsidiary, affiliate, or agent of that person; an
assignee of a financial obligation owed by the consumer to that
person; or a prospective assignee of a financial obligation owed by
the consumer to that person in conjunction with the proposed
purchase of the financial obligation.
(b) A subsidiary, affiliate, agent, assignee, or prospective
assignee of a person to which access has been granted for purposes
of facilitating an extension of credit or other permissible use.
(c) A state or local agency, law enforcement agency, trial
court, or private collection agency acting pursuant to a court
order, warrant, or subpoena.
(d) A child support agency acting pursuant to part d of title
IV of the social security act, 42 USC 651 to 669b.
(e) The state or its agents or assigns acting to investigate
fraud, acting to investigate or collect delinquent taxes or unpaid
court orders, or acting to fulfill any of its other statutory
responsibilities if those responsibilities are consistent with a
permissible purpose under 15 USC 1681b.
(f) A person setting or adjusting a rate, adjusting a claim,
or underwriting for insurance purposes.
(g) A person using credit information for the purpose of
prescreening as provided for by the fair credit reporting act, 15
USC 1681 to 1681v.
(h) A person administering a consumer report monitoring
subscription service to which the consumer has subscribed.
(i) A person providing a consumer with a copy of his or her
consumer report in response to the consumer's request.
(2) As used in this section:
(a) "Account" includes a demand deposit account.
(b) "Reviewing the account" includes activities related to
account maintenance, monitoring, credit line increases, and account
upgrades and enhancements.
Enacting section 1. This act takes effect January 1, 2008.