STAND. COM. REP. NO. 1541

Honolulu, Hawaii

RE:    H.B. No. 1612

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred H.B. No. 1612 entitled:

"A BILL FOR AN ACT RELATING TO CONSUMER CREDIT REPORTING AGENCIES,"

begs leave to report as follows:

     The purpose of this measure is to allow a consumer to place a security freeze on the consumer's credit report regardless of whether they have been the victim of identity theft.

     Your Committee received testimony in support of this measure from the Office of Consumer Protection of the Department of Commerce and Consumer Affairs and AARP Hawaii.  Testimony in opposition was submitted by one individual.  The Consumer Data Industry Association and the Retail Merchants of Hawaii submitted comments.

     Your Committee finds that there are some instances and circumstances in which a person may need to place a security freeze on their credit report although they have not yet established that they are a victim of identity theft.  Requiring a person to wait until they can establish that their identity has been stolen is an inadequate means of preventing identity theft and of preventing further damage to a person's credit once their identity has been stolen. 

     Your Committee notes that some concerns were raised as to the administrative costs to credit reporting agencies in placing a credit freeze on credit reports of consumers who are not victims of identity theft. 

     Your Committee also notes the concern that requiring a police report or other report establishing that a consumer's personal information has been used in an unlawful manner may be burdensome to consumers who need to freeze their credit report quickly in order to prevent further harm.  The measure as currently drafted would still require a consumer to submit these types of reports to a credit reporting agency when requesting a security freeze on their credit report. 

     Therefore, your Committee has amended this measure by:

     (1)  Clarifying that a credit reporting agency may not charge a fee to a victim of identity theft for placing or removing a security freeze on the victim's credit report;

     (2)  Adding language to allow a consumer to request a security freeze on their credit report; provided that if the request does not include a valid copy of a police report, investigative report, or complaint the consumer has filed with a law enforcement agency about unlawful use of the consumer's personal information by another person, each consumer credit reporting agency may charge a fee of up to $10 for placing a security freeze on the consumer's credit report; and

     (3)  Changing the effective date to encourage further discussion.

     Your Committee notes that a consumer who does not provide a police report or other report regarding the unlawful use of the consumer's information may be charged a fee by each credit reporting agency from which a consumer requests the freeze.  Your Committee further notes that there are currently three major credit reporting agencies.

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1612, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1612, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

____________________________

BRIAN T. TANIGUCHI, Chair