A California Assemblyman's bill that would impose new regulations on commercial credit reporting agencies took a hit this week after the State Assembly Committee on Banking and Finance removed the bill from the agenda for an upcoming hearing.
AB 2564, introduced by Assemblyman Brian Nestande (R), was set to be considered by the Banking and Finance Committee at a legislative hearing on May 5, but the bill was scratched earlier this week. This doesn't mean that the bill itself is defeated, just that it will not be considered by the California State Assembly. Under the state's legislative procedures, the bill can be repurposed and reconsidered in the Senate under certain circumstances, but with that said, the Committee's decision to exclude the bill from the hearing agenda should be welcome news to opponents of the bill who feared that the legislation could pose a threat to the free flow of commercial credit information in California.
As drafted, AB 2564 would (a) require a commercial credit reporting agency to furnish a source of information to the subject of a commercial credit report upon the request of a representative of a subject; (b) require a printed copy of the report to be provided at no cost to the subject of a report;
(c) prohibit an agency, or a business affiliate of that agency, from assessing a fee upon the subject of a report in connection with ensuring the proper data is contained within the commercial credit report of the subject, and (d) require an agency to endeavor to maintain the most accurate data possible regarding the subject of a report.
The bill closely resembles Virginia House Bill 2198, which Virginia's legislature considered over the course of 2013 before eventually abandoning it. NACM worked successfully to defeat HB 2198 in Virginia last year, opposing the bill on the basis that requiring commercial credit reporting agencies to reveal the identity of their sources would have cooled the free and open exchange of credit information in that state, and submitted a letter to the California Assembly Committee on Banking and Finance earlier this week objecting to AB 2564 on similar grounds. The letter can be found here.
- Jacob Barron, CICP, NACM staff writer