Texas 2009 - 81st Regular

Texas House Bill HB2129 Compare Versions

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1	1	81R13389 JE-D
2	2	By: Giddings H.B. No. 2129
3	3	Substitute the following for H.B. No. 2129:
4	4	By: Veasey C.S.H.B. No. 2129
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a consumer's option to prevent the sale of the
10	10	consumer's financial information by a financial institution;
11	11	providing a civil penalty.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
14	14	adding Chapter 279 to read as follows:
15	15	CHAPTER 279. SALE OF CONSUMER'S FINANCIAL INFORMATION
16	16	Sec. 279.001. DEFINITIONS. In this chapter:
17	17	(1) "Affiliate of a financial institution" means a
18	18	person who controls, is controlled by, or is under common control
19	19	with the financial institution. In this subdivision, "control"
20	20	means the possession, directly or indirectly, of the power to
21	21	direct or cause the direction of the management and policies of a
22	22	person, whether through the ownership of voting securities, by
23	23	contract, or otherwise.
24	24	(2) "Consumer" means an individual resident of this
25	25	state, or the legal representative of an individual resident of
26	26	this state, who obtains a financial product or service for
27	27	personal, family, or household purposes.
28	28	(3) "Financial information" means information, other
29	29	than information that a financial institution has a reasonable
30	30	basis to believe is lawfully made available to the general public,
31	31	obtained by a financial institution in connection with providing a
32	32	financial product or service to a consumer, including:
33	33	(A) information provided on an application for a
34	34	loan, credit card, or other financial product or service;
35	35	(B) account balance information;
36	36	(C) payment or overdraft history;
37	37	(D) credit or debit purchase information;
38	38	(E) information that indicates whether an
39	39	individual is or has been a consumer of a financial institution;
40	40	(F) information obtained in connection with
41	41	collecting on or servicing a loan; or
42	42	(G) information from a consumer report.
43	43	(4) "Financial institution" has the meaning assigned
44	44	by Section 201.101.
45	45	Sec. 279.002. INAPPLICABILITY TO CREDIT BUREAU. Nothing in
46	46	this chapter shall be interpreted to prevent a credit bureau from
47	47	obtaining a consumer's financial information without the consumer's
48	48	authorization.
49	49	Sec. 279.003. AUTHORIZATION REQUIRED FOR SALE OF FINANCIAL
50	50	INFORMATION. (a) A financial institution may sell a consumer's
51	51	financial information to another person only if the consumer
52	52	authorizes the sale of the information as provided by this chapter.
53	53	(b) A financial institution may sell a consumer's financial
54	54	information to an affiliate of the financial institution without
55	55	the consumer's authorization. An affiliate who receives a
56	56	consumer's financial information from a financial institution may
57	57	sell the information only if the consumer authorizes the financial
58	58	institution to sell the information as provided by this chapter.
59	59	Sec. 279.004. PRIVACY NOTICE AND AUTHORIZATION FOR SALE.
60	60	(a) A financial institution shall provide a written privacy notice
61	61	to:
62	62	(1) each consumer who is transacting business with or
63	63	using the services of the financial institution; and
64	64	(2) a consumer who begins a relationship with the
65	65	financial institution at the time the financial institution first
66	66	communicates in writing or in person with the consumer.
67	67	(b) The privacy notice shall:
68	68	(1) inform the consumer that the financial institution
69	69	may not sell the consumer's financial information if the consumer
70	70	does not authorize the sale of the information; and
71	71	(2) provide a form that the consumer may sign and
72	72	return to the financial institution to indicate that the consumer
73	73	authorizes the financial institution to sell the consumer's
74	74	financial information.
75	75	(c) A financial institution may sell a consumer's financial
76	76	information only after the financial institution receives the form
77	77	authorizing the sale of the information.
78	78	(d) A financial institution that does not sell a consumer's
79	79	financial information to a person other than an affiliate of the
80	80	financial institution is not required to provide a privacy notice
81	81	to a consumer under this section.
82	82	Sec. 279.005. WITHDRAWAL OF AUTHORIZATION FOR SALE OF
83	83	INFORMATION. A consumer who has authorized the sale of financial
84	84	information under Section 279.004 may at any time withdraw the
85	85	authorization in writing. The withdrawal of an authorization is
86	86	effective on the date the financial institution receives the
87	87	withdrawal.
88	88	Sec. 279.006. JOINT RELATIONSHIPS. (a) If two or more
89	89	consumers jointly obtain a financial product or service, the
90	90	financial institution may provide a privacy notice to one or all of
91	91	the consumers.
92	92	(b) If a consumer authorizes the sale of the consumer's
93	93	financial information as provided by this chapter, the financial
94	94	institution may sell any financial information relating to that
95	95	consumer, including information relating to a jointly obtained
96	96	product or service.
97	97	(c) If a consumer who does not authorize the sale of the
98	98	consumer's financial information as provided by this chapter
99	99	jointly obtains a financial product or service with another
100	100	consumer who has authorized the sale, the financial institution may
101	101	sell only the financial information of the first consumer that
102	102	relates to the jointly obtained product or service.
103	103	Sec. 279.007. FINANCIAL INSTITUTION MAY NOT REQUIRE
104	104	AUTHORIZATION. A financial institution may not require a
105	105	consumer's authorization for the sale of the consumer's financial
106	106	information as a condition of doing business with the financial
107	107	institution. A consent or waiver obtained from a consumer as a
108	108	condition of doing business with a financial institution is not
109	109	valid.
110	110	Sec. 279.008. LIABILITY. A person is liable to a consumer
111	111	for an intentional violation of this chapter in an amount equal to
112	112	the greater of:
113	113	(1) $1,000; or
114	114	(2) actual damages caused by the sale of the financial
115	115	information.
116	116	SECTION 2. (a) A financial institution shall provide each
117	117	person who is transacting business with or using the services of a
118	118	financial institution on the effective date of this Act a privacy
119	119	notice as required by Section 279.004, Finance Code, as added by
120	120	this Act, not later than the 60th day after the effective date of
121	121	this Act.
122	122	(b) A financial institution may not sell a consumer's
123	123	financial information after the 180th day after the effective date
124	124	of this Act unless authorized by the consumer under Chapter 279,
125	125	Finance Code, as added by this Act. For purposes of this subsection,
126	126	a sale occurs on the earlier of the date an enforceable agreement to
127	127	sell information is made or the date the information being sold is
128	128	disclosed.
129	129	SECTION 3. This Act takes effect September 1, 2009.