A bill before the California State Assembly would impose new regulations on providers of commercial credit reports. Assembly Bill 2564, introduced earlier this year by Assemblyman Brian Nestande (R), was referred to the Committee on Banking and Finance last week and represents the most recent effort by a state legislature to extend consumer credit reporting regulations to their commercial credit counterparts.
AB 2564 closely resembles Virginia House Bill 2198, which Virginia's legislature considered over the course of 2013 before eventually abandoning it. Specifically, 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.
There are a few key details that separate AB 2564 from Virginia's HB 2198. Whereas the Virginia bill would have required commercial credit reporting agencies to only reveal sources of so-called "negative information," California's bill would seemingly require agencies to provide the subject of a report with a source for any piece of information at the subject company’s request. There are also uncertainties in the California bill about the definition of the phrase "furnish a source of information," and just how much detail commercial reporting agencies would be required to provide to a subject company in order to comply with their request for a source. Virginia's legislation, on the other hand, specifically referred to revealing the identity of a source of information, whereas the first line of AB 2564 provides commercial credit reporting agencies to "protect the identity of a source of information."
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've cooled the free and open exchange of credit information in that state, and will continue to oppose any legislation that threatens the availability of credit information on commercial customers.
For more information, contact NACM Government Affairs Liaison Jacob Barron, CICP at email@example.com.
- Jacob Barron, CICP, NACM staff writer