HB5988 98TH GENERAL ASSEMBLY

LRB098 17776 JLS 52897 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5988

Introduced , by Rep. Derrick Smith

SYNOPSIS AS INTRODUCED:

815 ILCS 505/2RRR new

Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that it is an unlawful practice for a consumer reporting agency to lower a consumer's credit score solely because of credit inquiries regarding the consumer's credit.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by adding Section 2RRR as follows:

(815 ILCS 505/2RRR new)

Sec. 2RRR. Credit inquiries affecting credit scores.

(a) It is an unlawful practice for a credit reporting agency to use any designated credit inquiries made to a consumer reporting agency with respect to the consumer as a negative factor in:

(1) evaluating a consumer's creditworthiness, credit standing, or credit capacity; or

(2) determining:

(A) a consumer's eligibility for credit; or

(B) the terms or costs of any credit extended to a consumer.

(b) It is an unlawful practice for a credit reporting agency to consider any credit score generated for the consumer if the credit score is based upon a methodology in which the credit score is adversely affected by any designated credit inquiries made with respect to the consumer in:

(1) evaluating a consumer's creditworthiness, credit standing, or credit capacity; or

(2) determining:

(A) a consumer's eligibility for credit; or

(B) the terms or costs of any credit extended to a consumer.

(c) As used in this Section:

(1) "Consumer" means an individual:

(A) whose principal residence is in Illinois; and

(B) whose credit information and history are recorded in a consumer report.

(2) "Consumer report" means any written, oral, or other communication of any information that:

(A) is made by a consumer reporting agency;

(B) bears on a consumer's creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living; and

(C) is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing a consumer's eligibility for:

(i) credit or insurance to be used primarily for personal, family, or household purposes;

(ii) employment purposes; or

(iii) any other purpose authorized under Section 604 of the federal Fair Credit Reporting Act (15 U.S.C. 1681b).

(3) "Consumer reporting agency" means any person that, for monetary fees or 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.

(4) "Credit file", with respect to a consumer, means all the information that:

(A) pertains to the consumer; and

(B) is recorded and retained by a consumer reporting agency, regardless of how the information is stored.

(5) "Creditor" means:

(A) a lender of money; or

(B) a vendor or lessor of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction.

"Creditor" includes any successor in interest to, affiliate, associate, or subsidiary of, or director, officer, or employee of a lender, vendor, or lessor described in this item (5).

(6) "Credit score" means a numerical value or a categorization that:

(A) is derived from a statistical tool or modeling system; and

(B) is used by a creditor to predict the likelihood of certain credit behaviors, including default, regardless of whether the numerical value or categorization is referred to as a "credit score", "risk predictor", "risk score", some other term, or by a proprietary name.

(7) "Designated credit inquiry" refers to any of the following credit inquiries made to a consumer reporting agency about a consumer:

(A) a credit inquiry:

(i) not initiated by the consumer; or

(ii) requested by the consumer for the consumer's own credit information.

(B) a credit inquiry relating to insurance coverage.

(C) multiple creditor inquiries:

(i) coded by the consumer reporting agency on the consumer's consumer report as being from creditors engaged in the same industry; and

(ii) made within 30 days of one another.