Third Substitute H.B. 12

Representative Paul Ray proposes the following substitute bill:

1 CONSUMER CREDIT PROTECTION AMENDMENTS
2 2014 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Paul Ray
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies Title 13, Chapter 45, Consumer Credit Protection Act.
10 Highlighted Provisions:
11 This bill:
12 . defines terms;
13 . under certain circumstances, requires a consumer reporting agency to give a
14 consumer, prior to purchase, a written disclosure that states that the credit score the
15 consumer reporting agency provides may be different from the credit score used by
16 a lender;
17 . requires an entity that requests a consumer's credit score or credit report, for a
18 purpose other than the extension of credit, to provide the consumer with a written
19 disclosure that includes:
20 . the name of the consumer reporting agency that calculated the credit score;
21 . the industry that is associated with the algorithm used to generate the credit
22 score;
23 . the consumer's credit score; and
24 . if the requesting entity is a consumer credit counseling agency, the consumer's
25 credit report;

26 . prohibits a consumer reporting agency from refusing to sell a consumer's credit
27 score to a requesting entity solely because the requesting entity is required to make
28 the disclosures described in this bill;
29 . requires a credit bureau to give a requesting entity written notice if the credit bureau
30 suspends or terminates an ongoing service to the requesting entity of providing the
31 requesting entity a consumer's credit score or credit report upon request; and
32 . provides enforcement procedures for the provisions in this bill.
33 Money Appropriated in this Bill:
34 None
35 Other Special Clauses:
36 None
37 Utah Code Sections Affected:
38 AMENDS:
39 13-45-102 , as enacted by Laws of Utah 2006, Chapter 344
40 ENACTS:
41 13-45-501 , Utah Code Annotated 1953
42 13-45-502 , Utah Code Annotated 1953
43 13-45-503 , Utah Code Annotated 1953
44 13-45-504 , Utah Code Annotated 1953
45 RENUMBERS AND AMENDS:
46 13-45-601 , (Renumbered from 13-45-401, as enacted by Laws of Utah 2006, Chapter
47 344)
48
49 Be it enacted by the Legislature of the state of Utah:
50 Section 1. Section 13-45-102 is amended to read:
51 13-45-102. Definitions.
52 As used in this chapter:
53 (1) "Consumer" means [a natural person] an individual.
54 (2) "Consumer credit counseling agency" means:
55 (a) a person that is registered with the Division of Consumer Protection to provide debt
56 management services under Title 13, Chapter 42, Uniform Debt-Management Services Act; or

57 (b) a HUD-approved housing counseling agency.
58 [(2)] (3) "Consumer reporting agency" means [a person who, for fees, dues, or on a
59 cooperative basis, regularly engages in whole or in part in the practice of assembling or
60 evaluating information concerning a consumer's credit or other information for the purpose of
61 furnishing a credit report to another person.]:
62 (a) a credit bureau; or
63 (b) a person that obtains and resells any information, including a credit score or credit
64 report, produced, in whole or in part, by a credit bureau.
65 (4) "Credit bureau" means a person that, for fees, dues, or on a cooperative basis,
66 regularly engages in the practice of assembling or evaluating information concerning a
67 consumer's credit or other information for the purpose of furnishing a credit report or credit
68 score to another person.
69 [(3)] (5) "Credit report" means a consumer report, as defined in 15 U.S.C. Sec. 1681a[,
70 that is used or collected in whole or part for the purpose of serving as a factor in establishing a
71 consumer's eligibility for credit for personal, family, or household purposes].
72 (6) (a) "Credit score" means a numerical value or a categorization that is:
73 (i) derived from information in a consumer report;
74 (ii) derived from a statistical tool or modeling system; and
75 (iii) developed to predict, at least in part, the likelihood of:
76 (A) future insurance claims behavior; or
77 (B) credit behavior.
78 (b) "Credit score" includes:
79 (i) a risk predictor; or
80 (ii) a risk score.
81 (7) "Depository institution" is as defined in Section 7-1-103 .
82 (8) "Electronically signed" means executed by electronic sound, symbol, or process
83 attached to or logically associated with a record, demonstrating the intent to sign the record.
84 (9) "Extension of credit" means the right to defer payment of debt or to incur debt and
85 defer its payment.
86 (10) "Lender" means a person that regularly offers or makes an extension of credit to a
87 consumer.

88 (11) "Lender credit score" means a credit score that a mortgage lender uses to
89 underwrite or evaluate an individual's request for a mortgage loan, and that is calculated using
90 the same algorithm used by Fannie Mae, Freddie Mac, or a comparable entity.
91 (12) "Lessor" is as defined in Section 15-8-3 .
92 [(4)] (13) "Normal business hours" means Sunday through Saturday, between the hours
93 of 6:00 a.m. and 9:30 p.m., Mountain Standard or Mountain Daylight Time.
94 [(5)] (14) (a) "Personal information" means personally identifiable financial
95 information:
96 (i) provided by a consumer to another person;
97 (ii) resulting from any transaction with the consumer or any service performed for the
98 consumer; or
99 (iii) otherwise obtained by another person.
100 (b) "Personal information" does not include:
101 (i) publicly available information, as that term is defined by the regulations prescribed
102 under 15 U.S.C. Sec. 6804; or
103 (ii) any list, description, or other grouping of consumers, and publicly available
104 information pertaining to the consumers, that is derived without using any nonpublic personal
105 information.
106 (c) Notwithstanding Subsection [(5)] (14)(b), "personal information" includes any list,
107 description, or other grouping of consumers, and publicly available information pertaining to
108 the consumers, that is derived using any nonpublic personal information other than publicly
109 available information.
110 [(6)] (15) "Proper identification" has the same meaning as in 15 U.S.C. Sec.
111 1681h(a)(1), and includes:
112 (a) the consumer's full name, including first, last, and middle names and any suffix;
113 (b) any name the consumer previously used;
114 (c) the consumer's current and recent full addresses, including street address, any
115 apartment number, city, state, and ZIP code;
116 (d) the consumer's Social Security number; and
117 (e) the consumer's date of birth.
118 (16) (a) "Requesting entity" means a person that requests or obtains an individual's

119 credit report or credit score for a purpose other than the extension of credit, including a
120 consumer credit counseling agency, credit counselor, housing counselor, lessor, or employer.
121 (b) "Requesting entity" does not include a depository institution.
122 [(7)] (17) "Security freeze" means a prohibition, consistent with Section 13-45-201 , on
123 a consumer reporting agency's furnishing of a consumer's credit report to a third party intending
124 to use the credit report to determine the consumer's eligibility for credit.
125 Section 2. Section 13-45-501 is enacted to read:
126 Part 5. Credit Score Disclosure Requirements
127 13-45-501. Title.
128 This part is known as "Credit Score Disclosure Requirements."
129 Section 3. Section 13-45-502 is enacted to read:
130 13-45-502. Educational credit score -- Required disclosure.
131 (1) Except as provided in Subsection (2), when, for a purpose other than an extension
132 of credit, a consumer requests the consumer's credit score from a consumer reporting agency
133 and the consumer reporting agency provides a credit score that is not a lender credit score, the
134 consumer reporting agency shall give the consumer a written disclosure in substantially the
135 following form:
136 "This credit score will differ from the credit score used by a lender for the approval of a
137 residential mortgage or other loan. This credit score is generated from a formula that is
138 different from the formula used by lenders. Based on the credit score actually used by a lender,
139 rather than this credit score, the lender may offer you loan terms that are more or less costly to
140 you."
141 (2) If a consumer reporting agency described in Subsection (1) is also a lender, and the
142 consumer reporting agency provides the consumer a credit score that is not a lender credit score
143 that the consumer reporting agency uses when deciding whether to grant an extension of credit,
144 the consumer reporting agency shall give the consumer a written disclosure in substantially the
145 following form:
146 "This credit score is different from the credit score we use to evaluate whether to grant
147 an extension of credit. This credit score is generated from a formula that is different from the
148 formula we use to generate the credit score to evaluate whether to grant an extension of credit.
149 Based on the credit score we actually use, rather than this credit score, you may be offered loan

150 terms that are more or less costly to you."
151 (3) A person who gives a disclosure described in Subsection (1) or (2) shall ensure that
152 the disclosure is:
153 (a) independently displayed on a separate page;
154 (b) typed in at least 14-point font; and
155 (c) signed by the consumer, or if the credit score is obtained online, electronically
156 signed by the consumer, before the consumer purchases the credit score.
157 (4) This section does not apply to a depository institution.
158 Section 4. Section 13-45-503 is enacted to read:
159 13-45-503. Disclosure of credit score and other information to consumer.
160 (1) Except as provided in Subsection (2), within 10 days after the day on which a
161 requesting entity receives a consumer's credit score or credit report, the requesting entity shall
162 give the consumer a written disclosure that states:
163 (a) the name of the consumer reporting agency that calculated the credit score;
164 (b) the name of the industry that is associated with the algorithm used to generate the
165 credit score;
166 (c) the consumer's credit score; and
167 (d) if the requesting entity is a consumer credit counseling agency, the consumer's
168 credit report.
169 (2) A lessor shall disclose a consumer's credit score in accordance with Subsection (1)
170 within three days after the day on which:
171 (a) the lessor denies the consumer's application for a lease; or
172 (b) the consumer and the lessor enter into a lease agreement.
173 (3) A consumer reporting agency may not refuse to sell a consumer's credit score or
174 credit report to a requesting entity because the requesting entity is required to disclose the
175 credit score or the credit report to the consumer under this section.
176 Section 5. Section 13-45-504 is enacted to read:
177 13-45-504. Notification to requesting entity of suspension or termination.
178 If a credit bureau and a requesting entity have an ongoing arrangement by which the
179 credit bureau provides the requesting entity with a consumer's credit score or credit report upon
180 request, and the credit bureau suspends or terminates the service of providing the requesting

181 entity with a consumer's credit score or credit report upon request, the credit bureau shall,
182 within two business days after the day on which the credit bureau suspends or terminates the
183 service, give the requesting entity a written notice of suspension or termination that:
184 (1) states the date on which the credit bureau suspended or terminated the service;
185 (2) states the reason that the credit bureau suspended or terminated the service; and
186 (3) provides an address and a phone number that the requesting entity may use to
187 contact the credit bureau with any questions regarding the suspension or termination.
188 Section 6. Section 13-45-601 , which is renumbered from Section 13-45-401 is
189 renumbered and amended to read:
190 Part 6. Enforcement
191 [13-45-401]. 13-45-601. Enforcement.
192 (1) The attorney general may enforce this chapter's provisions.
193 (2) A person [who] that violates [this chapter's provisions] a provision from Section
194 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
195 of:
196 (a) no greater than $2,500 for a violation or series of violations concerning a specific
197 consumer; and
198 (b) no greater than $100,000 in the aggregate for related violations concerning more
199 than one consumer.
200 (3) A person that violates Section 13-45-502 , 13-45-503 , or 13-45-504 is subject to a
201 civil fine of:
202 (a) no less than $1,000 per violation; and
203 (b) no greater than $1,000,000 in the aggregate for related violations.
204 [(3)] (4) In addition to the penalties provided in [Subsection] Subsections (2) and (3),
205 the attorney general may seek injunctive relief to prevent future violations of this chapter in:
206 (a) the district court located in Salt Lake City; or
207 (b) the district court for the district in which resides a consumer who is the subject of a
208 credit report on which a violation occurs.