Legislature(2003 - 2004)

04/16/2003 01:00 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SB 64-CREDIT INFORMATION                                                                                
SENATOR HOLLIS  FRENCH, sponsor  of SB  64, explained  to members                                                               
that SB  64 is aimed  at stemming  the growth of  identify theft,                                                               
which is  one of  the fastest  growing crimes  in America.  It is                                                               
believed  that  more  than  750,000  people  may  be  victims  of                                                               
identity  theft each  year and  each  will spend  many hours  and                                                               
typically, more than  $1,000 to repair the damage done  to his or                                                               
her reputation  and finances. Victims of  identity theft continue                                                               
to be turned  down for loans, credit and for  jobs long after the                                                               
initial  damage. They  are victims,  but are  often made  to feel                                                               
guilty.  The first  indication many  people have  that they  have                                                               
been  victimized  is  when  credit  problems  surface.  Regularly                                                               
reviewing  one's  own  credit  report  is an  easy  way  to  stop                                                               
identity theft  in the early stages.  Providing Alaskan consumers                                                               
with one free credit report a  year will not only help consumers,                                                               
but  also  the many  businesses  that  extend credit.  Minimizing                                                               
losses to  the business community  through identity theft  is one                                                               
aim of this legislation.                                                                                                        
SENATOR FRENCH said businesses  inspect consumer credit histories                                                               
when   they   evaluate   applications  for   credit,   insurance,                                                               
employment  and even  leases. An  individual's credit  history is                                                               
recorded in  files maintained by  credit reporting  agencies that                                                               
sell those  reports. A credit  report often  contains information                                                               
about a person's  income, debts, credit and  payment history, and                                                               
it also  indicates whether  a person has  been sued,  arrested or                                                               
filed  for  bankruptcy. If  that  information  is incorrect,  the                                                               
consumer  can  suffer.  SB  64  will  require  consumer-reporting                                                               
agencies that  maintain files on  Alaskans to provide  an Alaskan                                                               
with one free copy  of his or her file once  a year if requested.                                                               
The report  would include  all consumer  and credit  reports. Six                                                               
other states have  taken similar strong action  to help consumers                                                               
protect and correct their credit ratings.                                                                                       
SENATOR THERRIAULT moved  to adopt Amendment 1  and asked Senator                                                               
French to address the proposed amendment.                                                                                       
SENATOR FRENCH  told members the  amendment was drafted  after he                                                               
spoke with Chair  Seekins about his concern  that businesses that                                                               
extend  credit might  somehow  become  responsible for  notifying                                                               
customers  of this  right. He  said that  is not  the aim  of the                                                               
legislation. The  purpose is  to enable  Alaskans to  contact the                                                               
three  big credit-reporting  agencies  and tell  them that  under                                                               
Alaska  law they  are entitled  to  one free  credit report  each                                                               
CHAIR SEEKINS said  it is not uncommon for businesses  to have to                                                               
prove  that they  gave notice  to consumers.  He said  if someone                                                               
came  to his  dealership and  applied  for credit  from the  Ford                                                               
Motor Credit Company, he might  be required to notify that person                                                               
of his or her right and if he  did not do so, he could be subject                                                               
to penalty. The  objective of the amendment is to  make sure that                                                               
someone in  the business of providing  a loan is not  required to                                                               
notify the applicant of this particular right.                                                                                  
SENATOR THERRIAULT again moved to adopt Amendment 1.                                                                            
CHAIR SEEKINS  announced that without objection,  Amendment 1 was                                                               
SENATOR FRENCH said  in his experience, states  with similar laws                                                               
post this consumer right on their state websites.                                                                               
CHAIR SEEKINS  said he has  found that  credit-reporting agencies                                                               
do not necessarily  object to having to provide  one free report.                                                               
They  see  it as  a  marketing  opportunity for  their  reporting                                                               
SENATOR  FRENCH  said  that  is a  valid  point  because  credit-                                                               
reporting agencies frequently market one  free credit report as a                                                               
come-on to certain individuals. His  take is that when people see                                                               
something offered  for free on  a website,  they know there  is a                                                               
CHAIR SEEKINS said they should know  that, but many people do not                                                               
make  that connection.  He said  he  is not  arguing against  the                                                               
bill, he  is just saying those  people that take advantage  of it                                                               
should  expect to  be targeted  for additional  solicitations. He                                                               
then took public testimony.                                                                                                     
MR. STEVE CLEARY  from the Alaska Public  Interest Research Group                                                               
(AkPIRG)  said  this  bill  would   provide  one  more  tool  for                                                               
individuals  to  manage  their  own  credit.  It  also  puts  the                                                               
responsibility for maintaining your own  file on the consumer. He                                                               
said  identity theft  is on  the increase,  especially among  the                                                               
elderly and AARP and similar  organizations will be excited about                                                               
this bill.                                                                                                                      
CHAIR  SEEKINS said  he would  be careful  about advising  people                                                               
that  one credit  check per  year will  prevent them  from having                                                               
their identity stolen.                                                                                                          
MR.  SAM  TRIVETT  said  that  SB 64  is  an  excellent  consumer                                                               
protection  bill.  He is  the  president  of the  Retired  Public                                                               
Employees Association  and although  he is not  representing that                                                               
association today he is aware that  identify theft is a big issue                                                               
for older people. SB 64 will  encourage citizens to do checks. He                                                               
found  he had  several credit  cards  listed on  his report  from                                                               
stores that  had been out of  business for many years.  He said a                                                               
credit check is beneficial for  citizens and businesses. He urged                                                               
members to support the bill.                                                                                                    
MS. MARIE DARLIN, coordinator of  the Capital City Task Force for                                                               
AARP, said AARP members have  been interested in this legislation                                                               
since  it  was  introduced  because   many  older  citizens  have                                                               
problems  with  their  credit   reports.  This  legislation  will                                                               
provide  an  opportunity  to  urge people  to  get  their  credit                                                               
checked. She asked if  there is any way to put  AARP members on a                                                               
"do not call" list regarding solicitations.                                                                                     
CHAIR SEEKINS said AARP would have to research that question.                                                                   
MS. DARLIN said that AARP supports SB 64.                                                                                       
SENATOR THERRIAULT  said he  does not believe  this will  have an                                                               
impact on  whether a  person would be  able to  block unsolicited                                                               
phone  calls selling  that service.  They would  probably receive                                                               
solicitations in the mail.                                                                                                      
SENATOR  ELLIS  pointed  out  that  Ms.  Darlin  was  referencing                                                               
another piece  of legislation  that addresses  the "do  not call"                                                               
CHAIR SEEKINS  encouraged Ms.  Darlin to  inform people  that the                                                               
marketing aspect will  come into play if this  bill passes. There                                                               
being  no  one   else  wishing  to  testify,   he  closed  public                                                               
2:10 p.m.                                                                                                                     
SENATOR OGAN expressed concern that  SB 64 is an unfunded mandate                                                               
on private business.                                                                                                            
CHAIR SEEKINS said  he investigated that question  and found that                                                               
the credit reporting  agencies do not have any  problem with this                                                               
legislation because  they see  it as  a marketing  opportunity to                                                               
try to get people to purchase regular reporting services.                                                                       
SENATOR FRENCH said  federal law requires free  credit reports to                                                               
people who have been unemployed for  a certain length of time, if                                                               
there has  been a denial of  credit or if other  specific actions                                                               
might arise to  question the status of one's  credit. Many states                                                               
have taken the  next step to mandate that consumers  be given one                                                               
free  check per  year, primarily  because of  the enormous  power                                                               
these  companies  have  over  people   in  the  realm  of  credit                                                               
CHAIR  SEEKINS said  the influence  of  incorrect information  on                                                               
one's credit report can be very negative.                                                                                       
SENATOR  ELLIS  said  this  legislation   seems  like  a  win-win                                                               
situation for  everyone. If this  required Alaskan  businesses to                                                               
pay for  something to help  out consumers, he would  be concerned                                                               
about it being an unfunded mandate.                                                                                             
CHAIR SEEKINS said he came to that same conclusion.                                                                             
SENATOR OGAN  said if the three  credit-reporting companies think                                                               
it is a great thing, he would like to hear from them.                                                                           
CHAIR SEEKINS  said they are international  companies. Right now,                                                               
a person can get a credit report  on the Internet at no cost, but                                                               
those companies can then solicit  that person for other services.                                                               
This  bill  basically  codifies  something  those  companies  are                                                               
already doing on their own websites.                                                                                            
SENATOR OGAN asked if this  legislation allows those companies to                                                               
market Alaskan consumers.                                                                                                       
CHAIR SEEKINS said the Legislature  cannot stop them without more                                                               
legislation.  He said  he does  not like  to force  anyone to  do                                                               
something by  law unless there  is an overriding  public purpose.                                                               
He  is willing  to  give  this legislation  the  benefit of  that                                                               
SENATOR  THERRIAULT  moved  CSSB   64(JUD)  from  committee  with                                                               
individual recommendations and the attached fiscal notes.                                                                       
CHAIR  SEEKINS  announced  that  without  objection,  the  motion                                                               
carried. He then announced a brief at-ease.                                                                                     

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