NY State Senate Bill 2019-S2539

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to banks
Jan 28, 2019	referred to banks

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2019-S2539 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Financial Services Law
Laws Affected:: Add Art 7 §§701 - 705, Fin Serv L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S6878
2021-2022: S5807
2023-2024: S2641

2019-S2539 (ACTIVE) - Summary

Instructs the department of financial services to regulate consumer reporting agencies by requiring licensing of credit reporting agencies, and allowing the department to examine the books and records of consumer reporting agencies.

2019-S2539 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2539

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the financial services law, in relation to regulation of
consumer reporting agencies

 
SUMMARY OF PROVISIONS:

This bill creates a new Article 7 within the existing Financial Services
Law that authorizes and empowers the New York State Department of Finan-
cial Services (DFS) to regulate consumer reporting agencies, including:
oversight, licensing, examination and rulemaking powers.

 
JUSTIFICATION:

On September 7th, 2017, one of three major consumer credit reporting
agencies in the United States-Equifax-reported that hackers gained
access to company data that potentially compromised sensitive informa-
tion for 143 million American consumers - nearly 44% of the U.S. popu-

lation. The breach included: social security numbers, driver's license
numbers, names, addresses and birth dates. Keys that unlock consumers'
medical histories, bank accounts, and employee accounts have also been
compromised. Credit card numbers for 209,000 consumers were stolen, and
documents with personal information used in disputes for 182,000 people
were also stolen.

The attack on Equifax represents one of the largest risks to personally
sensitive information in recent years. This incident is the third major
cybersecurity threat for the agency since 2015. Just last year, identify
thieves successfully hacked critical W-2 tax and salary data from an
Equifax website. Earlier this year, thieves again stole W-2 tax data
from an Equifax subsidiary, TALX, which provides online payroll, tax and
human resources services to some of the nation's largest corporations.
According to investigations, criminals gained access to certain files in
the company's system from mid-May to July, 2017 by exploiting a weak
point in website software.

Identity thieves can impersonate people with lenders, creditors, and
service providers who rely on personal identity information. Thieves can
also use stored information from Equifax and use it to open accounts
with creditors that use Experian or TransUnion. Cybersecurity profes-
sionals criticized Equifax for not improving its security practices
after previous thefts. Critics also argue that Equifax should have
multiple layers of controls. Consumers complained of a 6-week lag
between the discovery of the attack and Equifax's public disclosure.
Equifax discovered the intrusion on July 29th but it first disclosed the
attack publicly on September 7th.

There seems to be a broad sense of uncertainty by experts and lawmakers
as to which federal regulator, if any, is charged with the responsibil-
ity to monitor and do regular supervision on cybersecurity. The Consumer
Financial Protection Bureau has authority to police violations of
consumer protection laws by consumer credit bureaus, but the.; agency
generally leaves data privacy enforcement to the Federal Trade Commis-
sion.  However, the Trade Commission lacks the authority to impose big
fines or authorize fines for first time violations of certain rules.
Neither have commented on applicable law or jurisdiction. Although
federal lawmakers have promised legislation and public hearings, no
clear authority is forthcoming in short order. Thus, it is time for New
York State to lead on this issue, given the fact that millions of our
residents were exposed in this episode.

TO THIS END, THIS LEGISLATION ROVIDES A CLEAR REGULATORY MANDATE OVER
CREDIT REPORTING AGENCIES TO THE NEW YORK STATE DEPARTMENT OF FINANCIAL
SERVICES (DFS) ALLOWING THEM TO AGGRESSIVELY PROTECT CONSUMER INTERESTS
THROUGH POWERS THAT INCLUDE: OVERSIGHT, LICENSING, EXAMINATION AND RULE-
MAKING.

 
LEGISLATIVE HISTORY:

56878 COMRIE No Same as ON FILE: 01/03/18 Financial Services Law

 
TITLE:....Relates to regulation of consumer reporting agencies

09/20/17 REFERRED TO RULES

01/03/18 REFERRED TO BANKS

 
FISCAL IMPLICATIONS:

Possible increase of revenue due to the results of licensing and fines
collected for potential violations of future regulations.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S2539 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2539
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 28, 2019
                                ___________
 
 Introduced by Sens. COMRIE, ADDABBO, BAILEY, BROOKS, KENNEDY, KRUEGER --
   read  twice  and  ordered printed, and when printed to be committed to
   the Committee on Banks
 
 AN ACT to amend the financial services law, in relation to regulation of
   consumer reporting agencies

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The financial services law is amended by adding a new arti-
 cle 7 to read as follows:
                                 ARTICLE 7
                 REGULATION OF CONSUMER REPORTING AGENCIES
 SECTION 701. DEFINITIONS.
         702. AUTHORITY OF SUPERINTENDENT.
         703. LICENSE REQUIREMENTS.
         704. SUPERINTENDENT AUTHORIZED TO EXAMINE.
         705. SUPERINTENDENT AUTHORIZED TO PROMULGATE REGULATIONS.
   §  701.  DEFINITIONS.  FOR  THE  PURPOSES  OF  THIS  ARTICLE, THE TERM
 "CONSUMER REPORTING AGENCY" SHALL MEAN ANY PERSON  WHICH,  FOR  MONETARY
 FEES,  DUES,  OR  ON A COOPERATIVE NONPROFIT BASIS, REGULARLY ENGAGES IN
 WHOLE OR IN PART IN THE PRACTICE OF ASSEMBLING  OR  EVALUATING  CONSUMER
 CREDIT  INFORMATION OR OTHER INFORMATION ON CONSUMERS FOR THE PURPOSE OF
 FURNISHING CONSUMER REPORTS TO THIRD PARTIES, AND WHICH USES  ANY  MEANS
 OR  FACILITY  OF  INTERSTATE  COMMERCE  FOR  THE PURPOSE OF PREPARING OR
 FURNISHING CONSUMER REPORTS.
   § 702. AUTHORITY  OF  SUPERINTENDENT.  THE  SUPERINTENDENT  IS  HEREBY
 AUTHORIZED AND EMPOWERED TO MAKE SUCH GENERAL RULES AND REGULATIONS, AND
 SUCH SPECIFIC RULINGS, DEMANDS, AND FINDINGS AS MAY BE NECESSARY FOR THE
 PROPER CONDUCT OF THE BUSINESS AUTHORIZED AND LICENSED UNDER AND FOR THE
 ENFORCEMENT  OF  THIS  ARTICLE,  IN ADDITION HERETO AND NOT INCONSISTENT
 HEREWITH.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08657-01-9

 S. 2539                             2
 
   § 703. LICENSE REQUIREMENTS. (A) NO PERSON,  PARTNERSHIP,  ASSOCIATION
 OR  CORPORATION SHALL ENGAGE IN THE BUSINESS OF CREDIT REPORTING WITHOUT
 FIRST OBTAINING A LICENSE FROM THE SUPERINTENDENT.
   (B)  APPLICATION FOR SUCH LICENSE SHALL BE IN WRITING, UNDER OATH, AND
 IN THE FORM PRESCRIBED BY THE  SUPERINTENDENT,  AND  SHALL  CONTAIN  THE
 NAME,  AND  THE  ADDRESS BOTH OF THE RESIDENCE AND PLACE OF BUSINESS, OF
 THE APPLICANT, AND IF THE APPLICANT IS A CO-PARTNERSHIP OR  ASSOCIATION,
 OF  EVERY  MEMBER  THEREOF,  AND  IF  A CORPORATION, OF EACH OFFICER AND
 DIRECTOR THEREOF. FURTHER, IF THE BUSINESS  IS  TO  BE  CONDUCTED  AT  A
 SPECIFIC  ADDRESS, THE ADDRESS AT WHICH THE BUSINESS IS TO BE CONDUCTED,
 AND IN ADDITION, SUCH ADDITIONAL INFORMATION AS THE  SUPERINTENDENT  MAY
 REQUIRE.
   §  704.  SUPERINTENDENT  AUTHORIZED TO EXAMINE. (A) FOR THE PURPOSE OF
 DISCOVERING VIOLATIONS OF THIS ARTICLE OR SECURING INFORMATION  LAWFULLY
 REQUIRED  IN  THIS  SECTION,  THE SUPERINTENDENT MAY AT ANY TIME, AND AS
 OFTEN AS MAY BE DETERMINED, EITHER PERSONALLY OR BY A PERSON DULY DESIG-
 NATED BY THE SUPERINTENDENT,  INVESTIGATE  LICENSED  CONSUMER  REPORTING
 AGENCIES AND EXAMINE THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THERE-
 IN OF EVERY LICENSEE.
   (B)  FOR  THE  PURPOSE ESTABLISHED IN SUBDIVISION (A) OF THIS SECTION,
 THE SUPERINTENDENT AND HIS OR HER DULY DESIGNATED REPRESENTATIVES  SHALL
 HAVE FREE ACCESS TO THE OFFICES AND PLACES OF BUSINESS, BOOKS, ACCOUNTS,
 PAPERS,  RECORDS,  FILES,  SAFES AND VAULTS OF ALL LICENSEES. THE SUPER-
 INTENDENT SHALL HAVE AUTHORITY TO REQUIRE THE ATTENDANCE OF AND TO EXAM-
 INE UNDER OATH ALL PERSONS WHOSE TESTIMONY MAY BE REQUIRED  RELATIVE  TO
 CONSUMER REPORTING AGENCIES.
   §  705.  SUPERINTENDENT  AUTHORIZED TO PROMULGATE REGULATIONS. (A) THE
 SUPERINTENDENT SHALL HAVE THE POWER TO PRESCRIBE AND FROM TIME  TO  TIME
 WITHDRAW  OR  AMEND,  IN WRITING, RULES AND REGULATIONS AND ISSUE ORDERS
 AND GUIDANCE INVOLVING CREDIT REPORTING AGENCIES, NOT INCONSISTENT  WITH
 THE  PROVISIONS  OF THIS CHAPTER, THE BANKING LAW, THE INSURANCE LAW AND
 ANY OTHER LAW IN WHICH THE SUPERINTENDENT IS GIVEN AUTHORITY, INCLUDING:
   (1) EFFECTUATING ANY POWER  GIVEN  TO  THE  SUPERINTENDENT  UNDER  THE
 PROVISIONS  OF  THIS CHAPTER, THE INSURANCE LAW, THE BANKING LAW, OR ANY
 OTHER LAW TO PRESCRIBE FORMS OR MAKE REGULATIONS;
   (2) INTERPRETING THE PROVISIONS OF THIS CHAPTER,  THE  INSURANCE  LAW,
 THE BANKING LAW, OR ANY OTHER APPLICABLE LAW; AND
   (3)  GOVERNING  THE  PROCEDURES  TO BE FOLLOWED IN THE PRACTICE OF THE
 DEPARTMENT.
   (B) THE SUPERINTENDENT MAY PROMULGATE A LIST OF FINANCIAL PRODUCTS AND
 SERVICES EXCLUDED FROM REGULATION BY THE SUPERINTENDENT,  PROVIDED  THAT
 SUCH EXCLUSION SHALL NOT LIMIT IN ANY WAY THE ABILITY OF THE SUPERINTEN-
 DENT  TO  TAKE  ANY  ACTIONS  WITH RESPECT TO FRAUD PROVIDED FOR IN THIS
 CHAPTER, THE INSURANCE LAW, THE BANKING LAW OR ANY OTHER APPLICABLE LAW.
   § 2. This act shall take effect immediately.

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Senate Bill S2539

Sponsored By

Archive: Last Bill Status - In Senate Committee Banks Committee

co-Sponsors

2019-S2539 (ACTIVE) - Details

2019-S2539 (ACTIVE) - Summary

2019-S2539 (ACTIVE) - Sponsor Memo

2019-S2539 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2539

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Sponsored By

Leroy Comrie

Archive: Last Bill Status - In Senate Committee Banks Committee

co-Sponsors

Joseph P. Addabbo Jr.

Jamaal T. Bailey

John E. Brooks

Timothy M. Kennedy

2019-S2539 (ACTIVE) - Details

2019-S2539 (ACTIVE) - Summary

2019-S2539 (ACTIVE) - Sponsor Memo

2019-S2539 (ACTIVE) - Bill Text download pdf

Comments