What's happening
This bill establishes licensing, regulatory, and oversight requirements for consumer reporting agencies in New York State.
Why it matters
Creates a formal state licensing process for credit bureaus. By requiring consumer reporting agencies to obtain a license from the state superintendent, the bill ensures that these agencies must meet specific standards and undergo vetting before operating in New York. This could lead to higher accountability and better consumer protection.
Empowers state oversight and enforcement. The superintendent is given broad authority to investigate, examine records, and compel testimony from credit reporting agencies, allowing for more proactive enforcement against abuses, errors, or violations—potentially reducing identity theft, data mishandling, or incorrect reporting.
Allows for tailored regulation and consumer safeguards. The superintendent can create, amend, and withdraw rules and regulations as needed, providing flexibility to address evolving risks, industry practices, or technological changes. This could result in stronger, faster responses to emerging threats to consumers' financial information.
Provides for exceptions and focused enforcement. The superintendent may exempt certain financial products and services from regulation, helping to avoid unnecessary bureaucracy, but retains the power to act decisively in cases of fraud. This balance aims to protect consumers without stifling innovation or overregulating benign activities.
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Who cares
Headline styles
License Credit Reporting Agencies
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
History
- Referred to banks
- Referred to banks
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2539
2019-2020 Regular Sessions
IN SENATE
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 Assembly, do enact as follows:
Section 1. The financial services law is amended by adding a new article 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 designated by the superintendent, investigate licensed consumer reporting agencies and examine the books, accounts, records, and files used therein 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 superintendent shall have authority to require the attendance of and to examine 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 superintendent 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.