HB0314

HOUSE BILL 314

53rd legislature - STATE OF NEW MEXICO - second session, 2018

INTRODUCED BY

Javier Martínez and Debra M. Sariñana

AN ACT

RELATING TO CREDIT REPORTS; AMENDING THE FAIR CREDIT REPORTING AND IDENTITY SECURITY ACT TO ALLOW PLACEMENT OF A SECURITY FREEZE ON THE CREDIT REPORT OF A PROTECTED CONSUMER; ADDING DEFINITIONS TO THE FAIR CREDIT REPORTING AND IDENTITY SECURITY ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 56-3A-2 NMSA 1978 (being Laws 2007, Chapter 106, Section 2, as amended) is amended to read:

"56-3A-2. DEFINITIONS.--As used in the Fair Credit Reporting and Identity Security Act:

A. "consumer" means an individual who is a resident of New Mexico;

B. "consumer reporting agency" means any person that, for monetary fees, dues or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing credit reports to third parties;

C. "credit record" means a compilation of information that:

(1) identifies a protected consumer; and

(2) is created by a consumer reporting agency solely for the purpose of complying with the Fair Credit Reporting and Identity Security Act;

[C.] D. "credit report" means a written, oral or other communication of 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 that is used or expected to be used or collected for the purpose of serving as a factor in establishing the consumer's eligibility for credit, insurance, investment, benefit, employment or other purpose as authorized by the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681a;

[D.] E. "declaration of removal" means an identity theft report with a sworn affidavit that is delivered by regular or certified mail or facsimile or delivered electronically to a consumer reporting agency that operates within New Mexico and which affidavit states:

(1) that the consumer is entitled to removal of information in the consumer reporting agency's files on grounds that the consumer is the victim of identity theft; and

(2) the address at which the consumer is available for service of process by the consumer reporting agency and proper identifying information by which the consumer can be identified by the consumer reporting agency;

F. "operates within New Mexico" means accepting or maintaining a credit report on a person that resides within New Mexico;

[E.] G. "person" means an individual, corporation, firm, association, organization, trust, estate, cooperative, business, partnership, limited liability company, joint venture, governmental agency or subdivision or any legal or commercial entity;

H. "protected consumer" means an individual who is:

(1) under the age of sixteen years at the time a request for the placement of a security freeze is made; or

(2) an incapacitated person or a protected person for whom a guardian or conservator has been appointed;

I. "representative" means a person who provides to a consumer reporting agency sufficient proof of authority to act on behalf of a protected consumer;

[F.] J. "security freeze" means a notice placed in a consumer's or protected consumer's credit report, at the request of the consumer, protected consumer or representative and subject to certain exceptions, that prohibits a consumer reporting agency from releasing the consumer's or protected consumer's credit report or score relating to the extension of credit or the opening of new accounts without the express authorization of the consumer, [and

G. "operates within New Mexico" means accepting or maintaining a credit report on a person that resides within New Mexico.] protected consumer or representative;

K. "sufficient proof of authority" means documentation that shows a representative has authority to act on behalf of a protected consumer and includes:

(1) an order issued by a court of law;

(2) a lawfully executed and valid power of attorney; or

(3) a written, notarized statement signed by a representative that expressly describes the authority of the representative to act on behalf of a protected consumer; and

L. "sufficient proof of identification" means information or documentation that identifies a protected consumer or a representative of a protected consumer and includes:

(1) a social security number or a copy of a social security card issued by the social security administration;

(2) a certified or official copy of a birth certificate issued by the entity authorized to issue the birth certificate; or

(3) a copy of a driver's license, an identification card issued by the motor vehicle division of the taxation and revenue department or any other government-issued identification."

SECTION 2. Section 56-3A-3 NMSA 1978 (being Laws 2007, Chapter 106, Section 3, as amended) is amended to read:

"56-3A-3. SECURITY FREEZE--CONSUMERS--PROTECTED CONSUMERS.--

A. A consumer may elect to place a security freeze on the consumer's credit report by making a request to a consumer reporting agency by means of certified or regular mail sent to an address designated by the consumer reporting agency, or by means of a telephone or a secure electronic method if such means are provided by the agency. A consumer shall provide any personal identification required by the consumer reporting agency and pay a fee, if applicable.

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 from the consumer.

C. Within five business days of placing a security freeze on a consumer's credit report, a consumer reporting agency shall:

(1) send a written confirmation of the security freeze to the consumer; and

(2) provide the consumer with a unique personal identification number, password or similar device to be used by the consumer when providing authorization for the release of the consumer's credit report to a specific person or for a specific period of time or for permanent removal of the freeze.

D. While a security freeze is in effect, a consumer may authorize a consumer reporting agency to release the consumer's credit report to a specific person or to release the credit report for a specific period of time by contacting the consumer reporting agency by regular or certified mail [or by telephone, and as of September 1, 2008, by contacting the consumer reporting agency by mail], by telephone or by a secure electronic method, and providing:

(1) proper identification;

(2) the unique personal identification number, password or similar device;

(3) information regarding the party that is to have access to the credit report or the time period during which the credit report can be released; and

(4) payment of a fee, if applicable.

E. A consumer reporting agency that receives a request pursuant to Subsection D of this section shall release a consumer's credit report as requested by the consumer: [within three business days after the business day on which the consumer's request by regular or certified mail or by telephone is received by the consumer reporting agency. As of September 1, 2008, a consumer reporting agency that receives a request pursuant to Subsection D of this section shall release a consumer's credit report as requested by the consumer within fifteen minutes after the consumer's request is received by the consumer reporting agency through the use of a telephone or a secure electronic method provided by the agency, which may include the use of the internet, facsimile or other electronic means; provided that the consumer reporting agency is not required to release the credit report within fifteen minutes unless the consumer's request is received by the consumer reporting agency between the hours of 6:00 a.m. and 9:30 p.m. mountain standard or mountain daylight time, as applicable, Sunday through Saturday]

(1) within three business days after the business day on which the consumer's request was made by regular or certified mail; or

(2) within fifteen minutes if the consumer's request was made by telephone or a secure electronic method between the hours of 6:00 a.m. and 9:30 p.m. mountain standard or mountain daylight time; provided that the consumer reporting agency is not required to release the credit report within fifteen minutes if the consumer's request is received by the consumer reporting agency between the hours of 9:30 p.m. and 6:00 a.m. mountain standard or mountain daylight time.

F. A consumer reporting agency need not release a credit report within the time periods set forth in Subsection E of this section if:

(1) the consumer fails to meet the requirements of Subsection D of this section; or

(2) the consumer reporting agency's ability to remove the security freeze within fifteen minutes is prevented by:

(a) an act of God, including fire, earthquake, hurricane, storm or similar natural disaster or phenomenon;

(b) unauthorized or illegal acts by a third party, including terrorism, sabotage, riots, vandalism, labor strikes or disputes disrupting operations or similar occurrences;

(c) operational interruption, including electrical failure, unanticipated delay in equipment or replacement part delivery, computer hardware or software failure inhibiting response time or similar disruption;

(d) governmental action, including emergency orders or regulations, judicial or law enforcement actions or similar directives;

(e) regularly scheduled maintenance of, or updates to, the consumer reporting agency's systems during other than normal business hours; or

(f) commercially reasonable maintenance of, or repair to, the consumer reporting agency's systems that is unexpected or unscheduled.

G. If a consumer reporting agency erroneously releases information on a credit report while a security freeze is in effect and without a consumer's authorization, it shall notify the consumer of the release of information within five business days of the agency's discovery of the erroneous release of information and inform the consumer of the specific information released and the third party to whom it has been released.

H. A security freeze shall remain in place until a consumer requests its removal. A consumer reporting agency shall remove the security freeze within three business days after receiving a request from a consumer who provides the unique personal identification number, password or similar device and proper identification.

I. A consumer reporting agency may charge a consumer a fee of:

(1) no more than ten dollars ($10.00) for the placement of a security freeze or for processing a declaration of removal [A consumer reporting agency may charge a fee of]; (2) no more than five dollars ($5.00) for the release of a credit report, upon which a security freeze has been placed, to a specific person or for a specific period of time [A consumer reporting agency may charge a fee of]; and

(3) no more than five dollars ($5.00) for the removal of a security freeze or to change a declaration of removal; provided that a fee shall not be charged to a consumer who is sixty-five years of age or older or to a victim of identity theft who provides a valid police or investigative report filed with a law enforcement agency alleging the crime of identity theft. A consumer reporting agency shall accept payment by check sent via regular or certified mail and by debit or credit card via a secure electronic method and telephone and shall accept automatic clearinghouse and electronic fund transfer payments.

J. If a consumer's credit report was frozen due to a material misrepresentation of fact by the consumer and a consumer reporting agency intends to remove the freeze, the consumer reporting agency shall notify the consumer in writing five business days prior to removing the security freeze on the consumer's credit report.

K. A consumer reporting agency may advise a third party that a security freeze is in effect with respect to a consumer's credit report. A consumer reporting agency shall not suggest or otherwise state or imply to a third party that the security freeze reflects a negative credit score, history, report or rating.

L. The provisions of this section do not prevent a consumer reporting agency from releasing a consumer's credit report:

(1) to 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 purpose of reviewing the account or collecting the financial obligation owing for the account, contract or debt, or to a prospective assignee of a financial obligation owing by the consumer in conjunction with the proposed purchase of the financial obligation. As used in this paragraph, "reviewing the account" includes activities related to account maintenance, monitoring, credit line increases and account upgrades and enhancements;

(2) to a subsidiary, affiliate, agent, assignee or prospective assignee of a person to whom access has been granted by the consumer pursuant to Subsection D of this section for the purpose of facilitating the extension of credit or other permissible use;

(3) to a person or entity administering a credit file monitoring subscription service to which the consumer has subscribed;

(4) to a person or entity for the purpose of providing a consumer with a copy of the consumer's credit report upon the consumer's request;

(5) to a person acting pursuant to a court order, warrant or subpoena;

(6) to the child support enforcement division of the human services department for the purpose of carrying out its statutory duties of establishing and collecting child support obligations;

(7) to a governmental agency acting to investigate fraud, to investigate or collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory duties;

(8) to a person for the purposes of prescreening as defined by the federal Fair Credit Reporting Act;

(9) from a consumer reporting agency's database or file that consists only of and is used solely for one or more of the following:

(a) criminal record information;

(b) tenant screening;

(d) fraud prevention or detection; or

(10) to a person or entity for use in setting or adjusting an insurance rate, adjusting an insurance claim or underwriting for insurance purposes.

M. The following entities are not required to place a security freeze on a credit report:

(1) 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 credit reporting agencies and does not maintain a permanent database of credit information from which new consumer credit 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;

(2) 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 payment; or

(3) 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 banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.

N. A consumer reporting agency shall place a security freeze for a protected consumer if:

(1) the consumer reporting agency receives a request from the representative for the placement of the security freeze; and

(2) the representative:

(a) submits the request to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(b) provides to the consumer reporting agency sufficient proof of identification of the protected consumer and the representative;

(c) provides to the consumer reporting agency sufficient proof of authority to act on behalf of the protected consumer; and

(d) pays to the consumer reporting agency a fee as provided in Subsection V of this section.

O. If a consumer reporting agency does not have a credit report pertaining to a protected consumer when the consumer reporting agency receives a request under Paragraph (1) of Subsection N of this section, the consumer reporting agency shall create a credit record for the protected consumer; provided that a credit record may not be created or used to consider the protected consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living.

P. Within thirty days after receiving a request that meets the requirements of Subsection N or O of this section, a consumer reporting agency shall place a security freeze for the protected consumer.

Q. Unless a security freeze for a protected consumer is removed in accordance with Subsection S, T, U or W of this section, a consumer reporting agency may not release the protected consumer's credit report or credit record or any information derived from the protected consumer's credit report or credit record.

R. A security freeze for a protected consumer shall remain in effect until:

(1) the protected consumer or the representative requests the consumer reporting agency to remove the security freeze in accordance with Subsection S or T of this section; or

(2) the security freeze is removed in accordance with Subsection W of this section.

S. If a protected consumer wishes to remove a security freeze for the protected consumer, the protected consumer shall:

(1) submit a request for the removal of the security freeze to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(2) provide to the consumer reporting agency:

(a) proof that the sufficient proof of authority for the representative to act on behalf of the protected consumer is no longer valid; and

(b) sufficient proof of identification of the protected consumer; and

(3) pay to the consumer reporting agency a fee as provided in Subsection V of this section.

T. If a representative wishes to remove a security freeze for the protected consumer, the representative shall:

(1) submit a request for the removal of the security freeze to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(2) provide to the consumer reporting agency:

(a) sufficient proof of identification of the protected consumer and the representative; and

(b) sufficient proof of authority to act on behalf of the protected consumer; and

(3) pay to the consumer reporting agency a fee as provided in Subsection V of this section.

U. Within thirty days after receiving a request that meets the requirements of Subsection S or T of this section, the consumer reporting agency shall remove the security freeze for the protected consumer.

V. A consumer reporting agency may charge a reasonable fee, not exceeding five dollars ($5.00) for each placement or removal of a security freeze for a protected consumer; provided that the consumer reporting agency may not charge any fee under this section if the consumer reporting agency has a consumer report pertaining to the protected consumer and:

(1) the representative has obtained a police report or affidavit of alleged identity fraud against the protected consumer and provides a copy of the report to the consumer reporting agency; or

(2) a request for the placement or removal of a security freeze is for a protected consumer who is under the age of sixteen years at the time of the request.

W. A consumer reporting agency may remove a security freeze for a protected consumer or delete a credit record of a protected consumer if the security freeze was placed or the credit record was created based on a material misrepresentation of fact by the protected consumer or the representative.

X. This section shall be enforced solely by the attorney general.

Y. This section does not apply to the use of a protected consumer's credit report or credit record by:

(1) a person administering a credit report monitoring subscription service to which the protected consumer has subscribed or the representative has subscribed on behalf of the protected consumer;

(2) a person providing the protected consumer or the representative with a copy of the protected consumer's credit report on request of the protected consumer or the representative;

(3) 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 payment methods;

(4) a deposit account information service company that issues reports regarding account closures due to fraud, substantial overdrafts, automated teller machine abuse or similar negative information regarding a protected consumer to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution;

(5) an insurance company for the purpose of conducting its ordinary business;

(6) a consumer reporting agency that acts only to resell credit information by assembling and merging information contained in a database of another consumer reporting agency or multiple consumer reporting agencies and does not maintain a permanent database of credit information from which new credit reports are produced; or

(7) a consumer reporting agency's database or file that consists of information concerning and used for one or more of the following, but not for credit granting purposes:

(a) criminal record information;

(b) fraud prevention or detection;

(d) employment, tenant or individual background screening."

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