NY State Senate Bill 2015-S6853A

Senate Bill S6853A

2015-2016 Legislative Session

Prohibits a consumer reporting agency or lender from using certain information to determine an individual's credit worthiness

download bill text pdf

Archive: Last Bill Status - In Senate Committee Consumer Protection 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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 22, 2016	print number 6853a
Apr 22, 2016	amend and recommit to consumer protection
Feb 29, 2016	referred to consumer protection

Bill Amendments

Original

A (Active)

2015-S6853 - Details

See Assembly Version of this Bill:: A9150
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§380-a & 380-j, Gen Bus L; amd §§2 & 352, Bank L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S8155, A5106
2019-2020: S2302, A5294

2015-S6853 - Summary

Prohibits a consumer reporting agency or lender from using the credit scores of members of an individual's social network to determine the credit worthiness of such individual.

2015-S6853 - Sponsor Memo

                                 BILL NUMBER:  S6853

 TITLE OF BILL :

An act to amend the general business law and the banking law, in
relation to prohibiting a consumer reporting agency or lender from
using certain information to determine an individual's credit
worthiness

 PURPOSE OR GENERAL IDEA OF THE BILL :

Prohibits a consumer reporting agency or lender from using certain
information to determine an individual's credit worthiness.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1 - Section 380-a of the General Business Law is amended by
adding a new subdivision (u) to read as follows: (u) Members of a
consumer's social network: a group of individuals authorized by a
consumer to be part of his or her social media network.

Section 2 - Section 380-j of the General Business Law is amended by
adding a new subdivision (h) to read as follows: (h) No consumer
reporting agency shall collect, evaluate, report, or maintain in the
file on a consumer's social network as a factor to determine the
consumer's credit score, standing or credit capacity.

Section 3 - Section 2 of the Banking Law is amended by adding a new
subdivision 30 to read as follows: Members of a borrower's social
network: a group of individuals authorized by a borrower to be part of
his or her social media network.

Section 4 - Section 352 of the Banking Law is amended by adding a new
sixth undesignated paragraph to read as follows: No licensee shall
collect, evaluate, report or maintain in the file on a borrower, the
borrower's social network as a factor to determine the borrower's
credit worthiness, credit standing or credit capacity.

Section 5 - contains the effective date.

 JUSTIFICATION :

Consumers in the United States continue to be under attack by the
fuzzy math used to calculate credit scores. The US General Accounting
Office has estimated that some 75% of credit scores are wrong based on
incorrect information collected by credit bureaus and attached to
individual credit scores.

As if this was not detrimental enough to the average consumer, credit
scores are used by employers to screen potential employees, by
landlords and even by graduate schools for students applying to
business majors. The errors on these reports and the fuzzy math used
to create the credit score are impacting every aspect of our lives.

To make matters worse, the FICO score, a measure of consumer credit
risk, which has become a fixture of consumer lending in the United
States, is moving to add a consumer's social network as another
variable in the more than 100 variable equations used to compute a
consumer's credit score. FICO is looking to lumping all of the
individual consumers' social network members credit scores and taking
that average into account as a variable to derive a new credit score
for individual consumers. This is an obvious invasion of privacy and
another fuzzy math approach to hurt consumers.

It is obvious that individuals in low income communities will have a
social network of similar individuals based on geography only. So why
should low income consumers be further stigmatized and penalized via
worsening credit scores. FICO's attempt to do this should be banned
and this legislation does exactly that.

 PRIOR LEGISLATIVE HISTORY :

No prior legislative history.

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT :

None

 EFFECTIVE DATE :
Immediately.

2015-S6853 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6853

                            I N  S E N A T E

                            February 29, 2016
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Consumer Protection

AN ACT to amend the  general  business  law  and  the  banking  law,  in
  relation  to  prohibiting  a  consumer reporting agency or lender from
  using certain information to determine an individual's credit  worthi-
  ness

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 380-a of the general business  law  is  amended  by
adding a new subdivision (u) to read as follows:
  (U) THE TERM "MEMBERS OF A CONSUMER'S SOCIAL NETWORK" MEANS A GROUP OF
INDIVIDUALS  AUTHORIZED  BY  A  CONSUMER TO BE PART OF HIS OR HER SOCIAL
MEDIA COMMUNICATIONS AND NETWORK.
  S 2. Section 380-j of the general business law is amended by adding  a
new subdivision (h) to read as follows:
  (H)  NO  CONSUMER REPORTING AGENCY SHALL COLLECT, EVALUATE, REPORT, OR
MAINTAIN IN THE FILE ON A CONSUMER THE CREDIT WORTHINESS, CREDIT  STAND-
ING  OR  CREDIT CAPACITY OF MEMBERS OF THE CONSUMER'S SOCIAL NETWORK FOR
PURPOSES OF DETERMINING THE CREDIT WORTHINESS OF THE CONSUMER; THE AVER-
AGE CREDIT WORTHINESS, CREDIT STANDING OR CREDIT CAPACITY OF MEMBERS  OF
THE  CONSUMER'S  SOCIAL  NETWORK;  OR  ANY  GROUP  SCORE THAT IS NOT THE
CONSUMER'S OWN CREDIT WORTHINESS, CREDIT STANDING  OR  CREDIT  CAPACITY.
THE PROVISIONS OF THIS SUBDIVISION SHALL BE ENFORCED CONCURRENTLY BY THE
SUPERINTENDENT OF FINANCIAL SERVICES AND THE DIRECTOR OF THE DIVISION OF
CONSUMER  PROTECTION AND EACH SHALL UTILIZE THEIR CONSUMER COMPLAINT AND
ASSISTANCE HOTLINES TO DOCUMENT COMPLAINTS BY CONSUMERS WHO BELIEVE THAT
GROUP CREDIT RATINGS OF THEIR SOCIAL MEDIA NETWORK  ARE  BEING  USED  TO
DENY THEM CREDIT.
  S  3. Section 2 of the banking law is amended by adding a new subdivi-
sion 30 to read as follows:
  30. MEMBERS OF A BORROWER'S SOCIAL NETWORK. THE  TERM  "MEMBERS  OF  A
BORROWER'S  SOCIAL NETWORK" MEANS A GROUP OF INDIVIDUALS AUTHORIZED BY A
BORROWER TO BE PART OF  HIS  OR  HER  SOCIAL  MEDIA  COMMUNICATIONS  AND
NETWORK.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD13003-01-5

S. 6853                             2

  S  4.  Section 352 of the banking law is amended by adding a new sixth
undesignated paragraph to read as follows:
  NO LICENSEE SHALL COLLECT, EVALUATE, REPORT OR MAINTAIN IN THE FILE ON
A  BORROWER THE CREDIT WORTHINESS, CREDIT STANDING OR CREDIT CAPACITY OF
MEMBERS OF THE BORROWER'S SOCIAL NETWORK FOR PURPOSES OF DETERMINING THE
CREDIT WORTHINESS OF THE BORROWER; THE AVERAGE CREDIT WORTHINESS, CREDIT
STANDING OR CREDIT CAPACITY OF MEMBERS OF THE BORROWER'S SOCIAL NETWORK;
OR ANY GROUP SCORE THAT IS NOT THE  BORROWER'S  OWN  CREDIT  WORTHINESS,
CREDIT  STANDING  OR CREDIT CAPACITY.   THE PROVISIONS OF THIS PARAGRAPH
SHALL BE ENFORCED CONCURRENTLY BY THE SUPERINTENDENT AND THE DIRECTOR OF
THE DIVISION OF CONSUMER PROTECTION AND EACH SHALL UTILIZE THEIR CONSUM-
ER COMPLAINT AND ASSISTANCE HOTLINES TO DOCUMENT COMPLAINTS BY BORROWERS
WHO BELIEVE THAT GROUP CREDIT RATINGS OF THEIR SOCIAL MEDIA NETWORK  ARE
BEING USED TO DENY THEM CREDIT.
  S 5. This act shall take effect immediately.

2015-S6853A (ACTIVE) - Details

See Assembly Version of this Bill:: A9150
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§380-a & 380-j, Gen Bus L; amd §§2 & 352, Bank L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S8155, A5106
2019-2020: S2302, A5294

2015-S6853A (ACTIVE) - Summary

Prohibits a consumer reporting agency or lender from using the credit scores of members of an individual's social network to determine the credit worthiness of such individual.

2015-S6853A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6853A

 TITLE OF BILL :  An act to amend the general business law and the
banking law, in relation to prohibiting a consumer reporting agency or
lender from using certain information to determine an individual's
credit worthiness

 PURPOSE OR GENERAL IDEA OF THE BILL :

Prohibits a consumer reporting agency or lender from using the
membership of the consumer's social network information to determine
an individual's credit worthiness

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1. Section 380-a of the general business law is amended by
adding a new subdivision (u) to read as follows:

(u) Members of a consumer's social network: a group of individuals
authorized by a consumer to be part of his or her social media
network.

Section 2. Section 380-j of the general business law is amended by
adding a new subdivision (h) to read as follows:

(h)No consumer reporting agency shall collect, evaluate, report, or

maintain in the file on a consumer the consumer's use of internet or
web browsing history as a factor to determine the consumer's credit
score, standing or credit capacity.

Section 3. Section 2 of the banking law is amended by adding a new
subdivision 30 to read as follows:  Members of a borrower's social
network: a group of individuals authorized by a borrower to be part of
his or her social media network.

Section 4. Section 352 of the banking law is amended by adding a new
sixth undesignated paragraph to read as follows:

No licensee shall collect, evaluate, report or maintain in the file on
a borrower, the borrower's use of internet or internet viewing history
as a factor to determine the borrower's credit worthiness, credit
standing or credit capacity.

Section 5 contains the effective date.

 JUSTIFICATION :

Consumers in the United States continue to be under attack by the
fuzzy math used to calculate credit scores. The US General Accounting
Office has estimated that some 75% of credit scores are wrong based on
incorrect information collected by credit bureaus and attached to
individual credit scores.

As if this was not detrimental enough to the average consumer, credit
scores are used by employers to screen potential employees, by
landlords and even by graduate schools for students applying to
business majors. The errors on these reports and the fuzzy math used
to create the credit score are impacting every aspect of our lives.

To make matters worse, the FICO score, a measure of consumer credit
risk, which has become a fixture of consumer lending in the United
States, is moving to add consumer's social network as another variable
in the more than 100 variable equation used to compute a consumer's
credit score.


FICO is looking to lumping all of the individual consumers' social
network members credit scores and taking that average into account as
a variable to derive a new credit score for individual consumers.
This is an obvious invasion of privacy and another fuzzy math approach
to hurt consumers.

It is obvious that individuals in low income communities will have a
social network of similar individuals based on geography only. So why
should low income consumers be further stigmatized and penalized via
worsening credit scores. FICO's attempt to do this should be banned
and this legislation does exactly that.

 PRIOR LEGISLATIVE HISTORY :

No prior legislative history.

 FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT :

None

 EFFECTIVE DATE :
Immediately.

2015-S6853A (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6853--A

                            I N  S E N A T E

                            February 29, 2016
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on  Consumer  Protection
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

AN ACT to amend the  general  business  law  and  the  banking  law,  in
  relation  to  prohibiting  a  consumer reporting agency or lender from
  using certain information to determine an individual's credit  worthi-
  ness

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 380-a of the general business  law  is  amended  by
adding a new subdivision (u) to read as follows:
  (U) THE TERM "MEMBERS OF A CONSUMER'S SOCIAL NETWORK" MEANS A GROUP OF
INDIVIDUALS  AUTHORIZED  BY  A  CONSUMER TO BE PART OF HIS OR HER SOCIAL
MEDIA COMMUNICATIONS AND NETWORK.
  S 2. Section 380-j of the general business law is amended by adding  a
new subdivision (h) to read as follows:
  (H)  NO  CONSUMER REPORTING AGENCY SHALL COLLECT, EVALUATE, REPORT, OR
MAINTAIN IN THE FILE ON A CONSUMER THE CREDIT WORTHINESS, CREDIT  STAND-
ING  OR  CREDIT CAPACITY OF MEMBERS OF THE CONSUMER'S SOCIAL NETWORK FOR
PURPOSES OF DETERMINING THE CREDIT WORTHINESS OF THE CONSUMER; THE AVER-
AGE CREDIT WORTHINESS, CREDIT STANDING OR CREDIT CAPACITY OF MEMBERS  OF
THE  CONSUMER'S  SOCIAL  NETWORK;  OR  ANY  GROUP  SCORE THAT IS NOT THE
CONSUMER'S OWN CREDIT WORTHINESS, CREDIT STANDING  OR  CREDIT  CAPACITY.
THE PROVISIONS OF THIS SUBDIVISION SHALL BE ENFORCED CONCURRENTLY BY THE
SUPERINTENDENT OF FINANCIAL SERVICES AND THE DIRECTOR OF THE DIVISION OF
CONSUMER  PROTECTION AND EACH SHALL UTILIZE THEIR CONSUMER COMPLAINT AND
ASSISTANCE HOTLINES TO DOCUMENT COMPLAINTS BY CONSUMERS WHO BELIEVE THAT
GROUP CREDIT RATINGS OF THEIR SOCIAL MEDIA NETWORK  ARE  BEING  USED  TO
DENY THEM CREDIT.
  S  3. Section 2 of the banking law is amended by adding a new subdivi-
sion 30 to read as follows:
  30. MEMBERS OF A BORROWER'S SOCIAL NETWORK. THE  TERM  "MEMBERS  OF  A
BORROWER'S  SOCIAL NETWORK" MEANS A GROUP OF INDIVIDUALS AUTHORIZED BY A

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD13003-03-6

S. 6853--A                          2

BORROWER TO BE PART OF  HIS  OR  HER  SOCIAL  MEDIA  COMMUNICATIONS  AND
NETWORK.
  S  4.  Section 352 of the banking law is amended by adding a new sixth
undesignated paragraph to read as follows:
  NO LICENSEE SHALL COLLECT, EVALUATE, REPORT OR MAINTAIN IN THE FILE ON
A BORROWER THE CREDIT WORTHINESS, CREDIT STANDING OR CREDIT CAPACITY  OF
MEMBERS OF THE BORROWER'S SOCIAL NETWORK FOR PURPOSES OF DETERMINING THE
CREDIT WORTHINESS OF THE BORROWER; THE AVERAGE CREDIT WORTHINESS, CREDIT
STANDING OR CREDIT CAPACITY OF MEMBERS OF THE BORROWER'S SOCIAL NETWORK;
OR  ANY  GROUP  SCORE  THAT IS NOT THE BORROWER'S OWN CREDIT WORTHINESS,
CREDIT STANDING OR CREDIT CAPACITY.   THE PROVISIONS OF  THIS  PARAGRAPH
SHALL BE ENFORCED CONCURRENTLY BY THE SUPERINTENDENT AND THE DIRECTOR OF
THE DIVISION OF CONSUMER PROTECTION AND EACH SHALL UTILIZE THEIR CONSUM-
ER COMPLAINT AND ASSISTANCE HOTLINES TO DOCUMENT COMPLAINTS BY BORROWERS
WHO  BELIEVE THAT GROUP CREDIT RATINGS OF THEIR SOCIAL MEDIA NETWORK ARE
BEING USED TO DENY THEM CREDIT. THE SUPERINTENDENT SHALL ENSURE THAT THE
CREDIT SCORING FORMULAS FILED WITH THE DEPARTMENT DO NOT  CONTAIN  VARI-
ABLES WHICH ACCOUNT FOR INTERNET VIEWING HISTORY AS PART OF THAT FORMULA
BY ASKING THE LICENSEE TO CERTIFY TO THAT FACT.
  S 5. This act shall take effect immediately.

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