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AN ACT relating to credit. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 344 IS CREATED TO 3
READ AS FOLLOWS: 4
As used in Sections 1 to 5 of this Act: 5
(1) "Algorithm" means a mathematical set of rules that specify how a group of data 6
behaves and makes predictive assumptions about future behavior; 7
(2) "Behavior" means the behavior of an individual, including an individual's 8
physical and verbal behavior; 9
(3) "Financial institution" means any person providing financial or investment 10
services or products, and includes banks, bank holding companies, savings 11
banks, savings and loan associations, trust companies, credit unions, consumer 12
loan companies, industrial loan companies, mortgage loan companies and 13
brokers, deferred deposit service businesses, loan brokers, private bankers, sales 14
finance companies, broker-dealers, investment advisers, and any other similar 15
type of entity; 16
(4) "Reasonable suspicion" means the belief that an individual is in the process of 17
committing a crime or will commit a crime in the foreseeable future as 18
determined by a reasonable person; and 19
(5) "Social credit score" means a numeric or other designation assigned to an 20
individual or business based on their behaviors or actions including promptness 21
of paying taxes, fines, debts, fees, or other financial obligation, compliance with 22
government or administrative guidance, and compliance with regulatory 23
standards, for the purpose of discriminating against a person. 24
SECTION 2. A NEW SECTION OF KRS CHAPTER 344 IS CREATED TO 25
READ AS FOLLOWS: 26
(1) No governmental entity, financial institution, or person shall use, enforce, 27 UNOFFICIAL COPY 22 RS BR 2172
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provide data for use in, or otherwise participate in the creation or use of a social 1
credit score system. 2
(2) No governmental entity, financial institution, or person shall create any system 3
using behavioral attributes of a person as cause to deny that person his or her 4
Constitutional rights. 5
SECTION 3. A NEW SECTION OF KRS CHAPTER 344 IS CREATED TO 6
READ AS FOLLOWS: 7
(1) No individual's behavior shall be used to deny the individual of his or her rights 8
as stated in the Constitution of Kentucky or the Constitution of the United States 9
if that behavior is not a violation of Kentucky law, the policies or regulations of a 10
state agency, or the law of a political subdivision of Kentucky at the time the 11
behavior was performed. 12
(2) (a) Unless a person on any watch list maintained by any law enforcement 13
agency in the state is currently under investigation by law enforcement, the 14
person shall not be restricted from exercising his or her rights under the 15
Constitution of Kentucky or the Constitution of the United States. 16
(b) Should a person under investigation and on a watch list by any law 17
enforcement agency be prevented from exercising his or her rights, the 18
burden is on the law enforcement agency to provide the appropriate District 19
or Circuit Court the basis for denying the individual his or her rights should 20
the person challenge the basis for being under investigation. At a minimum, 21
the law enforcement agency shall provide the court with evidence 22
supporting reasonable suspicion that the individual in question is in the 23
process of committing a crime or likely to commit a crime in the foreseeable 24
future. 25
(c) Should any person be denied his or her rights as stated in the Constitution 26
of Kentucky or the Constitution of the United States, the appropriate 27 UNOFFICIAL COPY 22 RS BR 2172
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District or Circuit Court shall provide the person with written notification of 1
such denial, the legal basis for the denial, and the right to appeal the denial 2
within thirty (30) days of the denial. 3
(d) Algorithms based in whole or in part on the use of predictive analytics or 4
artificial intelligence shall not be used to evidence reasonable suspicion for 5
the purpose of preventing a person from exercising his or her rights. 6
(3) The provisions of this section shall not apply to individuals who are incarcerated 7
while awaiting trial or who have been found guilty of violating the laws of this 8
state and have had their access to government, public, or private services limited 9
during his or her time of incarceration or after release as a condition of release 10
or parole. 11
SECTION 4. A NEW SECTION OF KRS CHAPTER 344 IS CREATED TO 12
READ AS FOLLOWS: 13
(1) (a) No financial institution shall use, enforce, provide data for use in, or 14
otherwise participate in the creation or use of a social credit score system. 15
(b) No financial institution shall discriminate against any person based on 16
their political affiliation or other social credit, environmental, social, or 17
governance-related or other values-based impact criteria. 18
(2) Notwithstanding subsection (1) of this section, a financial institution may offer 19
investments, products, or services to a potential customer or investor that include 20
subjective selection standards if the standards are fully disclosed and explained to 21
the potential customer or investor before entering into a contract for the 22
investments, products, or services. 23
(3) A financial institution may discontinue or refuse to conduct business with a 24
person if the action is necessary for the physical safety of the financial 25
institution's customers or employees. 26
SECTION 5. A NEW SECTION OF KRS CHAPTER 344 IS CREATED TO 27 UNOFFICIAL COPY 22 RS BR 2172
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READ AS FOLLOWS: 1
Nothing in this Sections 1 to 4 of this Act shall prohibit the use of financial credit 2
scores by businesses or financial institutions for the purpose of determining the 3
financial credit worthiness of current or potential customers. 4