Consumer Finance

California Senate Committee Advances Five Bills to Amend the California Consumer Privacy Act

By Patricia Covington, Meghan Musselman, and Nora Udell, Hudson Cook, LLP

On July 9, 2019, California’s Senate Standing Committee on Judiciary considered and advanced five bills that would amend the California Consumer Privacy Act of 2018 (“CCPA”).  The bills will now go before the Appropriations Committee and if approved, will be voted on by the entire California Senate. AB 25 exempts businesses’ employees’ personal information from many of the CCPA’s requirements.  However, employers must disclose that they collect employees’ personal information and for what purposes, and employees will have a private right of action for damages in the event of a data breach. The employee information exemption will sunset after one year. AB 25 also provides for how businesses may require consumers to make requests and authenticate requests under the CCPA. AB 846 would permit businesses to offer voluntary loyalty programs, notwithstanding the CCPA’s antidiscrimination rule, and prohibits business from selling loyalty program data to third parties.  AB 874 redefines “publicly available” information and adds that “personal information” does not include deidentified or aggregate consumer information. AB 1146 creates an exception from the right to opt out and the right to delete for vehicle ownership information shared between manufacturers and dealers for necessary warranty and recall repairs. And AB 1564 would allow businesses that operate exclusively online to provide consumers with an email address, instead of a toll-free phone number, to exercise their CCPA rights.

CFPB Report Provides Snapshot of Third-Party Debt Collection Landscape

By Eric Mogilnicki and Lucy Bartholomew, Covington & Burling LLP

On July 18, the CFPB released a report on third-party debt collection activity in the United States.  The report covers the period from 2004 to 2018, and was based on an analysis of the Bureau’s Consumer Credit Panel, a national sample of approximately 5 million de-identified credit reports maintained by one of the nationwide credit reporting agencies.  Some of the key findings of the report are as follows:

  • More than one in four consumers had a third-party debt collection tradeline on their credit report.  The number includes tradelines by both debt buyers and non-buyers.
  • More than three out of four third-party debt collections tradelines were for medical, telecommunications, or utilities debt.
  • In Q2 2018, only .o9% of third-party collection tradelines resulted in a new Fair Credit Reporting Act dispute investigation, but this rate is triple the incidence of such disputes in Q2 2012.
  • Even as the number of third-party collections tradelines has increased, the number of third-party debt collectors furnishing such tradelines has declined significantly.  There were only 898 furnishers of third-party collections tradelines in Q2 2018, out of an estimated 9,330 debt collectors and debt buyers in the U.S.

House Financial Services Committee Advances FCRA Reform Legislation

By Eric Mogilnicki and Sam Adriance, Covington & Burling LLP

On July 11, the House Financial Services Committee held a markup for a series of bills designed to reform the credit reporting system and the Fair Credit Reporting Act (“FCRA”).  Each bill passed on a party-line vote.  The associated hearing was titled “Who’s Keeping Score? Holding Credit Bureaus Accountable and Repairing a Broken System.”

In her opening statement, Committee Chair Maxine Waters (D-CA) stated that “our credit reporting system is deeply broken.” She added that “[c]onsumers make more complaints about the credit reporting process to the Consumer Financial Protection Bureau than any other issue,” and that it “is exceedingly common that credit reports are filled with errors.”

The Committee approved the following credit reporting reform bills:

Kraninger Discusses Bureau’s Mission and Tools in Speech at the Exchequer Club

By Eric Mogilnicki and Lucy Bartholomew, Covington & Burling LLP

On July 18, Bureau Director Kathleen Kraninger addressed the Exchequer Club, an economic and financial policy group based in Washington, D.C.  In her remarks, Director Kraninger summarized the takeaways from the Bureau’s recent engagement with stakeholders, including through her listening tour and the Bureau’s new symposium series.  Echoing the themes of many of her recent speeches, Director Kraninger emphasized that she views the Bureau’s overall mission as preventing consumer harm, and described the various tools that Congress gave the Bureau to carry out that mission.  For example, in discussing consumer financial education, the Director described the Bureau’s focus on emergency savings, and indicated that the CFPB will soon be releasing the results of a study exploring whether prepaid cards could encourage consumers to save more during tax refund season.  In discussing supervision, Director Kraninger emphasized the importance of cross-agency cooperation, and stated that she hopes to use her new position as chair of the Federal Financial Institution Examination Council to promote a spirit of collaboration among regulators on consumer protection issues.



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