79R923 ATP-D
By: Shapleigh S.B. No. 76
A BILL TO BE ENTITLED
AN ACT
relating to a consumer's option to prevent the disclosure of the
consumer's financial information by a financial institution;
providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 279 to read as follows:
CHAPTER 279. DISCLOSURE OF CONSUMER'S FINANCIAL INFORMATION
Sec. 279.001. DEFINITIONS. In this chapter:
(1) "Affiliate of a financial institution" means a
person who controls, is controlled by, or is under common control
with the financial institution. In this subdivision, "control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by
contract, or otherwise.
(2) "Consumer" means an individual resident of this
state, or the legal representative of an individual resident of
this state, who obtains a financial product or service for
personal, family, or household purposes.
(3) "Financial information" means information, other
than information that a financial institution has a reasonable
basis to believe is lawfully made available to the general public,
obtained by a financial institution in connection with providing a
financial product or service to a consumer, including:
(A) information provided on an application for a
loan, credit card, or other financial product or service;
(B) account balance information;
(C) payment or overdraft history;
(D) credit or debit purchase information;
(E) information that indicates whether an
individual is or has been a consumer of a financial institution;
(F) information obtained in connection with
collecting on or servicing a loan; or
(G) information from a consumer report.
(4) "Financial institution" has the meaning assigned
by Section 201.101.
Sec. 279.002. AUTHORIZATION REQUIRED FOR DISCLOSURE OF
FINANCIAL INFORMATION FOR MARKETING PURPOSES. (a) A financial
institution may disclose a consumer's financial information to
another person for marketing purposes only if the consumer
authorizes the disclosure as provided by this chapter.
(b) A financial institution may disclose a consumer's
financial information to an affiliate of the financial institution
without the consumer's authorization. An affiliate who receives a
consumer's financial information from a financial institution may
disclose the information for marketing purposes only if the
consumer authorizes the financial institution to disclose the
information as provided by this chapter.
Sec. 279.003. PRIVACY NOTICE AND AUTHORIZATION FOR
DISCLOSURE. (a) A financial institution shall provide a written
privacy notice to:
(1) each consumer who is transacting business with or
using the services of the financial institution; and
(2) a consumer who begins a relationship with the
financial institution at the time the financial institution first
communicates in writing or in person with the consumer.
(b) The privacy notice shall:
(1) inform the consumer that the financial institution
may not disclose the consumer's financial information for marketing
purposes if the consumer does not authorize the disclosure; and
(2) provide a form that the consumer may sign and
return to the financial institution to indicate that the consumer
authorizes the financial institution to disclose the consumer's
financial information for marketing purposes.
(c) A financial institution may disclose a consumer's
financial information only after the financial institution
receives the form authorizing the disclosure.
(d) A financial institution that does not disclose a
consumer's financial information to a person other than an
affiliate of the financial institution is not required to provide a
privacy notice to a consumer under this section.
Sec. 279.004. WITHDRAWAL OF AUTHORIZATION FOR DISCLOSURE.
A consumer who has authorized disclosure under Section 279.003 may
at any time withdraw the authorization in writing. The withdrawal
of an authorization is effective on the date the financial
institution receives the withdrawal.
Sec. 279.005. JOINT RELATIONSHIPS. (a) If two or more
consumers jointly obtain a financial product or service, the
financial institution may provide a privacy notice to one or all of
the consumers.
(b) If a consumer authorizes the disclosure of the
consumer's financial information as provided by this chapter, the
financial institution may disclose any financial information
relating to that consumer, including information relating to a
jointly obtained product or service.
(c) If a consumer who does not authorize the disclosure of
the consumer's financial information as provided by this chapter
jointly obtains a financial product or service with another
consumer who has authorized the disclosure, the financial
institution may disclose only the financial information of the
first consumer that relates to the jointly obtained product or
service.
Sec. 279.006. FINANCIAL INSTITUTION MAY NOT REQUIRE
DISCLOSURE AUTHORIZATION. A financial institution may not require
a consumer's authorization for disclosure of the customer's
financial information for marketing purposes as a condition of
doing business with the financial institution. A consent or waiver
obtained from a consumer as a condition of doing business with a
financial institution is not valid.
Sec. 279.007. LIABILITY. A person is liable to a consumer
for an intentional violation of this chapter in an amount equal to
the greater of:
(1) $1,000; or
(2) actual damages caused by the disclosure of the
financial information.
SECTION 2. (a) A financial institution shall provide each
person who is transacting business with or using the services of a
financial institution on the effective date of this Act a privacy
notice as required by Section 279.003, Finance Code, as added by
this Act, not later than the 60th day after the effective date of
this Act.
(b) A financial institution may not disclose a consumer's
financial information for marketing purposes after the 180th day
after the effective date of this Act unless authorized by the
consumer under Chapter 279, Finance Code, as added by this Act.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.