S-1939

AN ACT Relating to consumer credit information; adding a new chapter to Title 19 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. It is the intent of the legislature to encourage the use of positive identification systems to the maximum extent possible in consumer credit reporting by consumer reporting agencies and business reporting agencies in order to improve identification of information on reports. The legislature finds that consumers and businesses are being denied credit or experiencing credit difficulties due to inaccuracies in credit reporting, reporting of others' credit problems on their credit reports, and inappropriate credit denial practices.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Business reporting agency" means an entity that reports on the credit history of any business, including sole proprietorships, partnerships, and corporations.

(2) "Consumer reporting agency" means an entity that reports on the credit history of an individual as defined in the federal fair credit reporting act, 15 U.S.C. Sec. 1681a (d) and (f). This definition is not intended to prevent reporting of individuals doing business as sole proprietorships or partnerships, or who are principals in a corporate entity.

(3) "Credit applicant" means a person or business on whom a credit report is being or has been created.

(4) "Credit reporting agency" means a business reporting agency or a consumer reporting agency.

(5) "Report user" means an entity that accesses or uses credit history information generated by consumer or business reporting agencies.

NEW SECTION. Sec. 3. (1) Credit reporting agencies and report users shall use, in addition to any other identifying information, a credit applicant's social security number, a federal taxpayer information number, or other positive identification system, if made available by the applicant, to avoid confusion with another's credit reports.

(2) Report users shall not at any time or in any way compel individuals to provide identifying information. Because providing a social security number or other identifying information increases the accuracy of consumer and business credit and financial reports, report users may, for purposes of determining credit worthiness, require identifying information before authorizing credit.

(3) Individuals or businesses shall not knowingly and with intent to defraud provide inaccurate identifying information, including, but not limited to, inaccurate social security numbers or federal taxpayer identification numbers, to the report user.

NEW SECTION. Sec. 4. A consumer reporting agency may furnish a consumer report under the following circumstances and no other:

(1) In response to the order of a court having jurisdiction to issue such an order.

(2) In accordance with the written instructions of the consumer to whom it relates.

(3) To a person it has reason to believe:

(a) Intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer;

(b) Intends to use the information for employment purposes;

(d) Intends to use the information in connection with a determination of the consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or

(e) Otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer.

NEW SECTION. Sec. 5. Credit inquiries into a person's credit report shall not be used as the sole factor in denying credit.

NEW SECTION. Sec. 6. (1) Consumer reporting agencies shall correct inaccuracies in credit reports within thirty days of discovering the inaccuracy. Written notice of the correction shall be sent to the credit applicant at the credit applicant's last known address within sixty days after discovering the inaccuracy.

(2) In extraordinary circumstances, a consumer reporting agency shall notify the credit applicant of the extraordinary circumstance preventing correction of an inaccuracy within the thirty-day period in subsection (1) of this section and indicate that a further response is forthcoming.

(3) A credit applicant's written objections to information contained in his or her credit report, or a brief statement that includes "In Dispute, See Customer Statement Below" or substantially similar language, shall be included in the same portion of the report as the disputed information.

NEW SECTION. Sec. 7. (1) Applicants may request and receive a free up-to-date credit report if they are rejected for credit.

(2) Upon written request, credit applicants may receive, at the charge of five dollars, one copy of their credit report once per calendar year from each consumer reporting agency compiling credit reports on the applicant. Such reports shall be used by the applicant solely for the purpose of verifying the accuracy of the contents of the reports and shall not be used for any other purpose.

NEW SECTION. Sec. 8. (1) Any person who violates this chapter shall be subject to statutory damages under this chapter not to exceed two hundred fifty dollars for each violation, recoverable in a civil action brought by the credit applicant, credit reporting agency, report user, or the attorney general, or by the prosecuting or city attorney of the county or city in which the violation occurred. However, no statutory damages under this chapter may be recovered for a violation of this chapter if the defendant shows by a preponderance of the evidence that the violation resulted from a bona fide error made notwithstanding the defendant's maintenance of procedures reasonably adopted to avoid such an error.

(2) The attorney general, or any prosecuting or city attorney within his or her respective jurisdiction, may bring an action in a court of competent jurisdiction in the name of the people of the state of Washington to enjoin reoccurring violations of this chapter and, upon notice to the defendant of not less than five days, to temporarily restrain and enjoin the violations. If it appears to the satisfaction of the court that the defendant has, in fact, violated this chapter, the court may issue an injunction restraining further violations without requiring proof that any person has been damaged by the violation.

(3) In these proceedings, if a court finds that the defendant has violated this chapter, the court may direct the defendant to pay any or all costs, including reasonable attorneys' fees, incurred by the attorney general or prosecuting or city attorney in seeking or obtaining relief under this section.

(4) A prevailing party is entitled to receive expenses for opposing a frivolous action as provided for in RCW 4.84.185.

NEW SECTION. Sec. 9. This chapter shall be known and cited as the fair credit reporting act.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act shall constitute a new chapter in Title 19 RCW.

NEW SECTION. Sec. 11. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.