Texas 2009 - 81st Regular

Texas Senate Bill SB163 Compare Versions

Only one version of the bill is available at this time.

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1	1	By: Ellis S.B. No. 163
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to a consumer's option to prevent the sale of the
7	7	consumer's financial information by a financial institution;
8	8	providing for civil liability.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
11	11	adding Chapter 279 to read as follows:
12	12	CHAPTER 279. SALE OF CONSUMER'S FINANCIAL INFORMATION
13	13	Sec. 279.001. DEFINITIONS. In this chapter:
14	14	(1) "Affiliate" with respect to a person means another
15	15	person who controls, is controlled by, or is under common control
16	16	with the person. In this subdivision, "control" means the
17	17	possession, directly or indirectly, of the power to direct or cause
18	18	the direction of the management and policies of a person, whether
19	19	through the ownership of voting securities, by contract, or
20	20	otherwise.
21	21	(2) "Consumer" means an individual resident of this
22	22	state, or the legal representative of an individual resident of
23	23	this state, who obtains a financial product or service for
24	24	personal, family, or household purposes.
25	25	(3) "Financial information" means information, other
26	26	than information that a financial institution has a reasonable
27	27	basis to believe is lawfully made available to the general public,
28	28	obtained by a financial institution in connection with providing a
29	29	financial product or service to a consumer, including:
30	30	(A) information provided on an application for a
31	31	loan, credit card, or other financial product or service;
32	32	(B) account balance information;
33	33	(C) payment or overdraft history;
34	34	(D) credit or debit purchase information;
35	35	(E) information obtained in connection with
36	36	collecting on or servicing a loan; or
37	37	(F) information from a consumer report.
38	38	(4) "Financial institution" has the meaning assigned
39	39	by Section 201.101.
40	40	Sec. 279.002. APPLICABILITY. This chapter does not apply
41	41	to:
42	42	(1) the sale of information that is incidental to a
43	43	transaction having a primary purpose other than the sale of
44	44	information, including the sale of a loan or of a business; or
45	45	(2) the disclosure of information to:
46	46	(A) a private collection agency for the purpose
47	47	of collecting a delinquent payment;
48	48	(B) a federal, state, or local governmental
49	49	entity for a legitimate governmental purpose; or
50	50	(C) a private vendor as necessary to allow the
51	51	vendor to perform a service for the governmental entity under a
52	52	contract with the governmental entity.
53	53	Sec. 279.003. AUTHORIZATION REQUIRED FOR SALE OF FINANCIAL
54	54	INFORMATION. (a) A financial institution may sell a consumer's
55	55	financial information to another person only if the consumer
56	56	authorizes the sale of the information as provided by this chapter.
57	57	(b) A financial institution may sell a consumer's financial
58	58	information without the consumer's authorization to an affiliate of
59	59	the financial institution.
60	60	(c) A financial institution may sell a consumer's financial
61	61	information to another financial institution for the purpose of
62	62	marketing the financial institution's products or services offered
63	63	under a joint agreement between the institutions without the
64	64	authorization required by Subsection (a) if the selling financial
65	65	institution is required to notify the consumer of the disclosure of
66	66	the information under the Gramm-Leach-Bliley Act (15 U.S.C. Section
67	67	6802(b)(2).
68	68	(d) An affiliate or financial institution that receives a
69	69	consumer's financial information under Subsection (b) or (c) may
70	70	sell the information to a person who is not an affiliate of that
71	71	affiliate or financial institution only if the consumer authorizes
72	72	that affiliate or financial institution to sell the information as
73	73	provided by this chapter.
74	74	Sec. 279.004. PRIVACY NOTICE AND AUTHORIZATION FOR SALE.
75	75	(a) A financial institution shall provide a written privacy notice
76	76	to:
77	77	(1) each consumer who is transacting business with or
78	78	using the services of the financial institution; and
79	79	(2) a consumer who begins a relationship with the
80	80	financial institution at the time the financial institution first
81	81	communicates in writing or in person with the consumer.
82	82	(b) The privacy notice shall:
83	83	(1) be in at least 10-point type that is boldfaced,
84	84	capitalized, or underlined or otherwise conspicuously set out from
85	85	the surrounding written material;
86	86	(2) inform the consumer that the financial institution
87	87	may not sell the consumer's financial information if the consumer
88	88	does not authorize the sale of the information; and
89	89	(3) provide a form that the consumer may sign and
90	90	return to the financial institution to indicate that the consumer
91	91	authorizes the financial institution to sell the consumer's
92	92	financial information.
93	93	(c) A financial institution may sell a consumer's financial
94	94	information only after the financial institution receives the form
95	95	authorizing the sale of the information.
96	96	(d) A financial institution that does not sell a consumer's
97	97	financial information to a person other than an affiliate of the
98	98	financial institution is not required to provide a privacy notice
99	99	to a consumer under this section. A financial institution that does
100	100	not sell a consumer's financial information to a person other than
101	101	another financial institution under a joint agreement as provided
102	102	by Section 279.003(c) is not required to provide a privacy notice
103	103	under this section but must provide any similar notice required by
104	104	other law.
105	105	Sec. 279.005. WITHDRAWAL OF AUTHORIZATION FOR SALE OF
106	106	INFORMATION. A consumer who has authorized the sale of financial
107	107	information under Section 279.004 may at any time withdraw the
108	108	authorization in writing. The withdrawal of an authorization is
109	109	effective on the date the financial institution receives the
110	110	withdrawal.
111	111	Sec. 279.006. JOINT RELATIONSHIPS. (a) If two or more
112	112	consumers jointly obtain a financial product or service, the
113	113	financial institution may provide a privacy notice to one or all of
114	114	the consumers.
115	115	(b) If a consumer authorizes the sale of the consumer's
116	116	financial information as provided by this chapter, the financial
117	117	institution may sell any financial information relating to that
118	118	consumer, including information relating to a jointly obtained
119	119	product or service.
120	120	(c) If a consumer who does not authorize the sale of the
121	121	consumer's financial information as required by this chapter
122	122	jointly obtains a financial product or service with another
123	123	consumer who has authorized the sale, the financial institution may
124	124	sell only the financial information of the first consumer that
125	125	relates to the jointly obtained product or service.
126	126	Sec. 279.007. FINANCIAL INSTITUTION MAY NOT REQUIRE
127	127	AUTHORIZATION. A financial institution may not require a
128	128	consumer's authorization for the sale of the consumer's financial
129	129	information as a condition of doing business with the financial
130	130	institution. A consent or waiver obtained from a consumer as a
131	131	condition of doing business with a financial institution is not
132	132	valid.
133	133	Sec. 279.008. LIABILITY. A person is liable to a consumer
134	134	for an intentional violation of this chapter in an amount equal to
135	135	the greater of:
136	136	(1) $1,000; or
137	137	(2) actual damages caused by the sale of the financial
138	138	information.
139	139	SECTION 2. (a) A financial institution shall provide each
140	140	person who is transacting business with or using the services of the
141	141	financial institution on the effective date of this Act a privacy
142	142	notice as required by Section 279.004, Finance Code, as added by
143	143	this Act, not later than the 60th day after the effective date of
144	144	this Act.
145	145	(b) A financial institution may not sell a consumer's
146	146	financial information after the 180th day after the effective date
147	147	of this Act unless authorized by the consumer under Chapter 279,
148	148	Finance Code, as added by this Act. For purposes of this
149	149	subsection, a sale occurs on the earlier of the date an enforceable
150	150	agreement to sell information is made or the date the information is
151	151	sold.
152	152	SECTION 3. This Act takes effect immediately if it receives
153	153	a vote of two-thirds of all the members elected to each house, as
154	154	provided by Section 39, Article III, Texas Constitution. If this
155	155	Act does not receive the vote necessary for immediate effect, this
156	156	Act takes effect September 1, 2009.