79R1931 ATP-D

By:  Riddle                                                       H.B. No. 379



A BILL TO BE ENTITLED

AN ACT

relating to the use of the credit score of a consumer who does not 
have debt for certain purposes; providing penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 35, Business & Commerce 
Code, is amended by adding Section 35.62 to read as follows:
	Sec. 35.62.  USE OF CREDIT SCORE OF CONSUMER WHO DOES NOT 
HAVE DEBT FOR NONCREDIT PURPOSES.  (a)  In this section:
		(1)  "Adverse action" includes:                                        
			(A)  the denial of, increase in a charge for, or 
reduction in the amount of goods or services, including insurance 
coverage, sought by a consumer; and
			(B)  an action or determination with respect to a 
consumer's employment that is adverse to the consumer's interests.
		(2)  "Consumer" means an individual who resides in this 
state.       
		(3)  "Credit information" means any credit-related 
information that is derived from a credit report or provided to a 
business in an application for credit and that bears on a consumer's 
creditworthiness, credit standing, or credit capacity.
		(4)  "Credit score" means a number or rating derived 
from an algorithm, computer application, model, or other process 
that is based on credit information and used to predict a consumer's 
creditworthiness or credit capacity.
	(b)  A business may not take an adverse action against a 
consumer because of the consumer's credit score, other than a 
determination with respect to a consumer's application for credit 
or another action in connection with a loan transaction, if:
		(1)  the consumer does not have debt; and                              
		(2)  whether the consumer has debt was a factor in 
computing the consumer's credit score.
	(c)  To the extent permitted by other law, a business may 
take an adverse action against a consumer described by Subsection 
(b) if the business considers available credit information other 
than the consumer's credit score or lack of debt.
	(d)  A business commits an unlawful employment practice 
subject to administrative review by the Texas Workforce Commission 
civil rights division under Subchapter E, Chapter 21, Labor Code, 
if the business violates this section with respect to the 
employment of a consumer.
	(e)  An insurer to which Article 21.49-2U, Insurance Code, 
applies commits an unfair practice in violation of Chapter 541, 
Insurance Code, and is subject to sanctions under Chapter 82, 
Insurance Code, if the insurer violates this section in connection 
with the provision of insurance coverage to a consumer.
	(f)  A person commits an offense if a person violates this 
section, other than in connection with the employment of a consumer 
or the provision of insurance coverage to a consumer.  An offense 
under this subsection is a Class B misdemeanor.
	SECTION 2.  This Act takes effect September 1, 2005.