Assembly Bill 1220 (Skinner) Credit Report Fairness

ISSUE Credit reports describe consumers credit worthiness and detail their credit history. These reports are requested by banks when consumers apply for loans, by credit card companies when consumers apply for credit cards, by landlords when consumer apply for housing, and by employers when consumer apply for jobs. Due to the scope and significance of credit reports, it is vital that reports are accurate and that consumers see complete versions of their credit reports to verify their accuracy. Regrettably, according to a recent study by the Federal Trade Commission, 40 million Americans report inaccuracies on their credit reports. There are three nationwide credit reporting agencies: Equifax, Experian, and TransUnion. Each agency is required, by federal law, to provide one free credit report to a consumer, upon request, every 12 months. While the right of a consumer to obtain a copy of his or her credit report from a credit reporting agency goes a long way to ensuring the accuracy of credit reports, it may not give the consumer a complete picture about his or her credit history. The reports that users receive sometimes contain information about the credit history of other consumers. When an adverse decision is based upon such information, the consumer may not know about it, and therefore would not be able to correct it. Federal law allows a user of consumer credit reports to provide its copy of a report about a consumer to the consumer, upon request, after taking an adverse action against the consumer based on information in the report. It also prohibits credit reporting agencies from interfering with the ability of users to provide reports to consumers under these circumstances. However, credit reporting agencies nevertheless discourage users from complying with consumer requests in their contracts with users. AB 1220 (SKINNER) AB 1220 prohibits credit reporting agencies from discouraging users of credit reports from providing consumers with copies of their reports under the circumstances authorized by federal law. SUPPORT Privacy Rights Clearinghouse Consumer Federation of California CalPIRG

Consumers Union California Senior Legislature

Assemblymember Nancy Skinner Staff Contact: Alison Merrilees (916) 319-2015 or alison.merrilees@asm.ca.gov