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H.B. 158

             1     

CONSUMER CREDIT PROTECTION AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Paul Ray

             5     
Senate Sponsor: Patricia W. Jones

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Consumer Credit Protection Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    under certain circumstances, requires the consumer reporting agency to give the
             14      consumer, prior to purchase, a written disclosure that states that the credit score may
             15      be different from the credit score used by a lender;
             16          .    requires an entity that requests a consumer's credit score, for a purpose other than
             17      the extension of credit, to provide the consumer with a written disclosure that
             18      includes:
             19              .    the name of the consumer reporting agency that calculated the credit score;
             20              .    the model used to generate the credit score; and
             21              .    the consumer's credit score;
             22          .    prohibits a consumer reporting agency from refusing to sell a consumer's credit
             23      score to a requesting entity solely because the requesting entity is required to make
             24      the disclosures described in this bill; and
             25          .    provides enforcement procedures for the provisions in this bill.
             26      Money Appropriated in this Bill:
             27          None


             28      Other Special Clauses:
             29          None
             30      Utah Code Sections Affected:
             31      AMENDS:
             32          13-45-102, as enacted by Laws of Utah 2006, Chapter 344
             33      ENACTS:
             34          13-45-501, Utah Code Annotated 1953
             35          13-45-502, Utah Code Annotated 1953
             36          13-45-503, Utah Code Annotated 1953
             37      RENUMBERS AND AMENDS:
             38          13-45-601, (Renumbered from 13-45-401, as enacted by Laws of Utah 2006, Chapter
             39      344)
             40     
             41      Be it enacted by the Legislature of the state of Utah:
             42          Section 1. Section 13-45-102 is amended to read:
             43           13-45-102. Definitions.
             44          As used in this chapter:
             45          (1) "Consumer" means [a natural person] an individual.
             46          (2) "Consumer credit counseling agency" means:
             47          (a) a person that is registered with the Division of Consumer Protection to provide debt
             48      management services under Title 13, Chapter 42, Uniform Debt-Management Services Act; or
             49          (b) a HUD-approved housing counseling agency.
             50          [(2)] (3) "Consumer reporting agency" means [a person who, for fees, dues, or on a
             51      cooperative basis, regularly engages in whole or in part in the practice of assembling or
             52      evaluating information concerning a consumer's credit or other information for the purpose of
             53      furnishing a credit report to another person.]:
             54          (a) a credit bureau; or
             55          (b) a person that obtains and resells any information, including a credit score or credit
             56      report, produced, in whole or in part, by a credit bureau.
             57          (4) "Credit bureau" means a person that, for fees, dues, or on a cooperative basis,
             58      regularly engages in the practice of assembling or evaluating information concerning a


             59      consumer's credit or other information for the purpose of furnishing a credit report or credit
             60      score to another person.
             61          (5) "Credit counseling services" means counseling related to money management, debt
             62      reduction, or financial education.
             63          [(3)] (6) "Credit report" means a consumer report, as defined in 15 U.S.C. Sec. 1681a[,
             64      that is used or collected in whole or part for the purpose of serving as a factor in establishing a
             65      consumer's eligibility for credit for personal, family, or household purposes].
             66          (7) (a) "Credit score" means a numerical value or a categorization that is:
             67          (i) derived from information in a consumer report;
             68          (ii) derived from a statistical tool or modeling system; and
             69          (iii) developed to predict, at least in part, the likelihood of:
             70          (A) future insurance claims behavior; or
             71          (B) credit behavior.
             72          (b) "Credit score" includes:
             73          (i) a risk predictor; or
             74          (ii) a risk score.
             75          (8) "Electronically signed" means executed by electronic sound, symbol, or process
             76      attached to or logically associated with a record, demonstrating the intent to sign the record.
             77          (9) "Extension of credit" means the right to defer payment of debt or to incur debt and
             78      defer its payment.
             79          (10) "Lender" means a person that regularly offers or makes an extension of credit to a
             80      consumer.
             81          (11) "Lender credit score" means a credit score that a mortgage lender uses to
             82      underwrite or evaluate an individual's request for a mortgage loan, and that is calculated using
             83      the same algorithm as Fannie Mae, Freddie Mac, or a comparable entity.
             84          [(4)] (12) "Normal business hours" means Sunday through Saturday, between the hours
             85      of 6:00 a.m. and 9:30 p.m., Mountain Standard or Mountain Daylight Time.
             86          [(5)] (13) (a) "Personal information" means personally identifiable financial
             87      information:
             88          (i) provided by a consumer to another person;
             89          (ii) resulting from any transaction with the consumer or any service performed for the


             90      consumer; or
             91          (iii) otherwise obtained by another person.
             92          (b) "Personal information" does not include:
             93          (i) publicly available information, as that term is defined by the regulations prescribed
             94      under 15 U.S.C. Sec. 6804; or
             95          (ii) any list, description, or other grouping of consumers, and publicly available
             96      information pertaining to the consumers, that is derived without using any nonpublic personal
             97      information.
             98          (c) Notwithstanding Subsection [(5)] (13)(b), "personal information" includes any list,
             99      description, or other grouping of consumers, and publicly available information pertaining to
             100      the consumers, that is derived using any nonpublic personal information other than publicly
             101      available information.
             102          [(6)] (14) "Proper identification" has the same meaning as in 15 U.S.C. Sec.
             103      1681h(a)(1), and includes:
             104          (a) the consumer's full name, including first, last, and middle names and any suffix;
             105          (b) any name the consumer previously used;
             106          (c) the consumer's current and recent full addresses, including street address, any
             107      apartment number, city, state, and ZIP code;
             108          (d) the consumer's Social Security number; and
             109          (e) the consumer's date of birth.
             110          (15) "Requesting entity" means a person that requests or obtains an individual's credit
             111      report or credit score for a purpose other than the extension of credit, including a consumer
             112      credit counseling agency, credit counselor, housing counselor, lessor, insurer, or employer.
             113          [(7)] (16) "Security freeze" means a prohibition, consistent with Section 13-45-201 , on
             114      a consumer reporting agency's furnishing of a consumer's credit report to a third party intending
             115      to use the credit report to determine the consumer's eligibility for credit.
             116          Section 2. Section 13-45-501 is enacted to read:
             117     
Part 5. Credit Score Disclosure Requirements

             118          13-45-501. Title.
             119          This part is known as "Credit Score Disclosure Requirements."
             120          Section 3. Section 13-45-502 is enacted to read:


             121          13-45-502. Educational credit score -- Required disclosure.
             122          (1) Except as provided in Subsection (2), when, for a purpose other than an extension
             123      of credit, a consumer requests the consumer's credit score from a consumer reporting agency
             124      and the consumer reporting agency provides a credit score that is not a lender credit score, the
             125      consumer reporting agency shall give the consumer a written disclosure in substantially the
             126      following form:
             127          "This credit score may differ substantially from the credit score used by a lender for the
             128      approval of a residential mortgage or other loan. The Consumer Financial Protection Bureau
             129      has warned that this credit score may greatly misrepresent a lender's assessment of your
             130      creditworthiness. Based on the score actually used by a lender, you may be offered less
             131      favorable terms that are more costly to you."
             132          (2) If a consumer reporting agency described in Subsection (1) is also a lender, and the
             133      consumer reporting agency provides the consumer a credit score that is not a lender credit score
             134      that the consumer reporting agency uses when deciding whether to grant an extension of credit,
             135      the consumer reporting agency shall give the consumer a written disclosure in substantially the
             136      following form:
             137          "This credit score is different from the credit score we use to evaluate whether to grant
             138      an extension of credit. The Consumer Financial Protection Bureau has warned that this credit
             139      score may greatly misrepresent our or another lender's assessment of your creditworthiness.
             140      Based on the credit score that we would actually use, you may be offered less favorable terms
             141      that are more costly to you."
             142          (3) A disclosure described in Subsection (1) or (2) shall be:
             143          (a) independently displayed on a separate page;
             144          (b) typed in at least 14-point font; and
             145          (c) signed by the consumer, or if the credit score is obtained online, electronically
             146      signed by the consumer, before the consumer purchases the credit score.
             147          Section 4. Section 13-45-503 is enacted to read:
             148          13-45-503. Disclosure of credit score to consumer.
             149          (1) Within 10 days after the day on which a requesting entity receives a consumer's
             150      credit score, the requesting entity shall give the consumer a written disclosure that states:
             151          (a) the name of the consumer reporting agency that calculated the credit score;


             152          (b) the unique name associated with the algorithm used to generate the credit score;
             153      and
             154          (c) the consumer's credit score.
             155          (2) A consumer reporting agency may not refuse to sell a consumer's credit score to a
             156      requesting entity because the requesting entity is required to disclose the credit score to the
             157      consumer under Subsection (1).
             158          Section 5. Section 13-45-601 , which is renumbered from Section 13-45-401 is
             159      renumbered and amended to read:
             160     
Part 6. Enforcement

             161           [13-45-401].     13-45-601. Enforcement.
             162          (1) The attorney general may enforce this chapter's provisions.
             163          (2) A person [who] that violates [this chapter's provisions] a provision from Section
             164      13-45-201 , 13-45-202 , 13-45-203 , 13-45-204 , 13-45-205 , or 13-45-301 is subject to a civil fine
             165      of:
             166          (a) no greater than $2,500 for a violation or series of violations concerning a specific
             167      consumer; and
             168          (b) no greater than $100,000 in the aggregate for related violations concerning more
             169      than one consumer.
             170          (3) A person that violates Section 13-45-502 or 13-45-503 is subject to a civil fine of:
             171          (a) no less than $10,000 per violation; and
             172          (b) no greater than $1,000,000 in the aggregate for related violations.
             173          [(3)] (4) In addition to the penalties provided in [Subsection] Subsections (2) and (3),
             174      the attorney general may seek injunctive relief to prevent future violations of this chapter in:
             175          (a) the district court located in Salt Lake City; or
             176          (b) the district court for the district in which resides a consumer who is the subject of a
             177      credit report on which a violation occurs.






Legislative Review Note
    as of 2-21-13 10:18 AM


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