HF 3500

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to consumer protection; permitting consumers to "freeze" their credit
reports as a matter of security; proposing coding for new law in Minnesota
Statutes, chapter 13C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [13C.05] CONSUMER SECURITY FREEZE.
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new text begin new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms
have the following meanings:
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new text begin (a) "Consumer" means an individual.
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new text begin (b) "Consumer reporting agency" means any person, for monetary fees, dues, or on
a cooperative nonprofit basis, regularly engages in whole or in part in the practice of
assembling or evaluating consumer credit information or other information on consumers
for the purpose of furnishing consumer reports to third parties.
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new text begin (c) "Consumer report" or "credit report" means any written, oral, or other
communication of any information by a consumer reporting agency bearing on a
consumer's credit worthiness, credit standing, credit capacity, character, general
reputation, personal characteristics, or mode of living which is used or expected to be used
or collected in whole or in part for the purpose of serving as a factor in establishing the
consumer's eligibility for:
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new text begin (1) credit or insurance to be used primarily for personal, family, or household
purposes, except that nothing in this act authorizes the use of credit evaluations, credit
scoring, or insurance scoring in the underwriting of personal lines of property or casualty
insurance;
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new text begin (2) employment purposes; or
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new text begin (3) any other purpose authorized under United States Code, title 15, section 1681(b).
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new text begin (d) "Security freeze" means a notice, at the request of the consumer and subject to
certain exceptions, that prohibits the consumer reporting agency from releasing all or any
part of the consumer's credit report or any information derived from it without the express
authorization of the consumer. If a security freeze is in place, such a report or information
may not be released to a third party without prior express authorization from the consumer.
This subdivision 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 credit report.
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new text begin (e) "Reviewing the account" or "account review" includes activities related to
account maintenance, monitoring, credit line increases, and account upgrades and
enhancements.
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new text begin Subd. 2. new text end

new text begin Security freeze; timing, covered entities, cost. new text end

new text begin (a) A consumer may place
a security freeze on his or her credit report by:
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new text begin (1) making a request by first class United States mail;
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new text begin (2) making a request by telephone by providing certain personal identification; or
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new text begin (3) making a request directly to the consumer reporting agency through a secure
electronic mail connection, which connection shall be made available by the agency.
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new text begin (b) A consumer reporting agency shall place a security freeze on a consumer's credit
report no later than three business days after receiving a request pursuant to paragraph (a).
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new text begin (c) The consumer reporting agency shall send a written confirmation of the security
freeze to the consumer within three business days of placing the freeze and at the same
time shall provide the consumer with a unique personal identification number or password
to be used by the consumer when providing authorization for the release of his or her credit
report for a specific party or specific period of time, or when permanently lifting the freeze.
new text end

new text begin (d) If the consumer wishes to allow his or her credit report to be accessed by a
specific party or for a specific period of time while a freeze is in place, the consumer shall
contact the consumer reporting agency via telephone, first class United States mail, or
secure electronic mail, with a request that the freeze be temporarily lifted, and provide
the following:
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new text begin (1) proper identification;
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new text begin (2) the unique personal identification number or password provided by the consumer
reporting agency pursuant to paragraph (c); and
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new text begin (3) the proper information regarding the third party who is to receive the credit
report or the time period for which the report is available to users of the credit report.
new text end

new text begin (e) A consumer reporting agency that receives a request from a consumer to
temporarily lift a freeze on a credit report pursuant to paragraph (d) shall comply with
the request as quickly as possible, but in no event later than three business days after
receiving the request.
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new text begin (f) A consumer reporting agency shall develop procedures involving the use of
telephone, fax, or, upon the consent of the consumer in the manner required by the federal
Electronic Signatures in Global and National Commerce Act, United States Code, title 15,
section 7001, et seq., for legally required notices, by the Internet, electronic mail, or other
electronic media to receive and process a request from a consumer to temporarily lift a
freeze on a credit report pursuant to paragraph (d) in an expedited manner.
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new text begin (g) A consumer reporting agency shall remove or temporarily lift a freeze placed
on a consumer's credit report only in the following cases:
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new text begin (1) upon consumer request, pursuant to paragraph (d) or (j); or
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new text begin (2) if the consumer's credit report was frozen due to a material misrepresentation of
fact by the consumer. If a consumer reporting agency intends to remove a freeze upon
a consumer's credit report pursuant to this paragraph, the consumer reporting agency
shall notify the consumer in writing five business days before removing the freeze on the
consumer's credit report.
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new text begin (h) If a third party requests access to a consumer credit report on which a security
freeze is in effect, and this request is in connection with an application for credit or any
other use, and the consumer does not allow his or her credit report to be accessed for that
specific party or period of time, the third party may treat the application as incomplete.
new text end

new text begin (i) If a third party requests access to a consumer credit report on which a security
freeze is in effect for the purpose of receiving, extending, or otherwise using the credit in
it, and not for the sole purpose of account review, the consumer credit reporting agency
must notify the consumer that an attempt has been made to access the credit report.
new text end

new text begin (j) A security freeze remains in place until the consumer requests that the security
freeze be removed. A consumer reporting agency shall remove a security freeze as quickly
as possible, but in no event later than three business days after receipt of a request for
removal from a consumer who provides both of the following:
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new text begin (1) proper identification; and
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new text begin (2) the unique personal identification number or password provided by the consumer
reporting agency pursuant to paragraph (c).
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new text begin (k) A consumer reporting agency shall require proper identification of the person
making a request to remove a security freeze.
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new text begin (l) A consumer reporting agency may not suggest or otherwise state or imply to a
third party that the consumer's security freeze reflects a negative credit score, history,
report, or rating.
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new text begin (m) The provisions of this section do not apply to the use of a consumer credit
report by any of the following:
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new text begin (1) a person, or the person's subsidiary, affiliate, agent, or assignee with which
the consumer has or, prior to assignment, had an account, contract, or debtor-creditor
relationship for the purposes of reviewing the account or collecting the financial obligation
owing for the account, contract, or debt;
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new text begin (2) a subsidiary, affiliate, agent, assignee, or prospective assignee of a person to
whom access has been granted under subdivision 2, paragraph (d), for purposes of
facilitating the extension of credit or other permissible use;
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new text begin (3) any person acting pursuant to a court order, warrant, or subpoena;
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new text begin (4) a state or local agency which administers a program for establishing and
enforcing child support obligations;
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new text begin (5) the Department of Health or its agents or assigns acting to investigate fraud;
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new text begin (6) the Department of Revenue or its agents or assigns acting to investigate or
collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory
responsibilities;
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new text begin (7) any person administering a credit file monitoring subscription service to which
the consumer has subscribed; or
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new text begin (8) any person for the purpose of providing a consumer with a copy of his or her
credit report upon the consumer's request.
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new text begin (n) A consumer may not be charged for any services related to the security freeze,
except that a consumer reporting agency may charge a consumer a fee of no more than $5
to reissue a personal identification number or password issued pursuant to paragraph (c).
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new text begin Subd. 3. new text end

new text begin Notice of rights. new text end

new text begin At any time that a consumer is required to receive a
summary of rights required under section 609 of the federal Fair Credit Reporting Act,
United States Code, title 15, section 1681(g), the following notice must be included:
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new text begin "Minnesota Consumers Have the Right to Obtain a Security Freeze
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new text begin You may obtain a security freeze on your credit report at no charge to protect your
privacy and ensure that credit is not granted in your name without your knowledge. You
have a right to place a security freeze on your credit report pursuant to Minnesota law.
new text end

new text begin The security freeze will prohibit a consumer reporting agency from releasing any
information in your credit report without your express authorization or approval.
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new text begin The security freeze is designed to prevent credit, loans, and services from being
approved in your name without your consent. When you place a security freeze on your
credit report, within three business days you will be provided a personal identification
number or password to use if you choose to remove the freeze on your credit report or to
temporarily authorize the release of your credit report for a specific party, parties, or for a
specific period of time after the freeze is in place. To provide that authorization, you must
contact the consumer reporting agency and provide all of the following:
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new text begin (1) The unique personal identification number or password provided by the
consumer reporting agency.
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new text begin (2) Proper identification to verify your identity.
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new text begin (3) The proper information regarding the third party or parties who are to receive
the credit report or the period of time for which the report shall be available to users
of the credit report.
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new text begin A consumer reporting agency that receives a request from a consumer to lift
temporarily a freeze on a credit report shall comply with the request as quickly as possible,
but no later than three business days after receiving the request.
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new text begin A security freeze does not apply to circumstances where you have an existing
account relationship and a copy of your report is requested by your existing creditor
or its agents or affiliates for certain types of account review, collection, fraud control,
or similar activities.
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new text begin If you are actively seeking a new credit, loan, utility, telephone, or insurance
account, you should understand that the procedures involved in lifting a security freeze
may slow your own applications for credit. You should plan ahead and lift a freeze, either
completely if you are shopping around or specifically for a certain creditor, with enough
advance notice before you apply for new credit for the lifting to take effect. You should
lift the freeze at least three business days before applying for a new account."
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new text begin Subd. 4. new text end

new text begin Penalties and remedies. new text end

new text begin A person violating this section is subject to
the penalties and remedies in section 8.31.
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