What's happening
This bill prohibits lenders and credit agencies from using information about a person's social network or internet history to determine individual creditworthiness.
Why it matters
Protects individual privacy. by ensuring that lenders and credit agencies cannot use your friends, online contacts, or social media interactions to assess your creditworthiness, reducing the risk that your personal associations negatively impact your financial opportunities.
Prevents “guilt by association”. in financial decisions, making sure you are judged on your own financial behavior and credit history, not the financial status or online activity of people you know or interact with.
Limits data-driven discrimination. by prohibiting the use of group scores or averages from your social network or your internet browsing history in determining your eligibility for loans or credit, which could otherwise reinforce social inequalities.
Strengthens consumer protections. by requiring enforcement from both the Department of Financial Services and the Division of Consumer Protection, including hotlines for complaints, helping ensure compliance and giving consumers a clear route to report possible violations.
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Who cares
Headline styles
Ban Social Media Credit Scores
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Social Media Credit Checks
In Senate Committee · Rules · Sponsor Marcos Crespo
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8155
IN SENATE
April 11, 2018
Introduced by Sen. KAVANAGH -- 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 worthiness
The People of the State of New York, represented in Senate and Assembly, 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.
§ 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 standing or credit capacity of members of the consumer's social network for purposes of determining the credit worthiness of the consumer; the average 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.
§ 3. Section 2 of the banking law is amended by adding a new subdivision 31 to read as follows:
31. 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.
LBD08179-01-7
S. 8155 2
§ 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 consumer 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 variables which account for internet viewing history as part of that formula by asking the licensee to certify to that fact.
§ 5. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law and the bank- ing law, in relation to prohibiting a consumer reporting agency or lend- er from using certain information to determine an individual's credit worthiness
Purpose
Prohibits a consumer reporting agency or lender from using the member- ship of the consumer's social network information to determine an indi- vidual'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 incor- rect 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 vari- able 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
2017: A5106 by Crespo: referred to consumer affairs and protection 2016: A9150 by Crespo: referred to consumer affairs and protection
Fiscal implications for state and local government
None
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.