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A BILL TO BE ENTITLED
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AN ACT
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relating to notification to check verification entities that a |
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customer is a victim of identity theft and the consequences of the |
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notice. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 35, Business & Commerce |
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Code, is amended by adding Section 35.595 to read as follows: |
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Sec. 35.595. NOTIFICATION TO CHECK VERIFICATION ENTITIES |
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THAT CUSTOMER IS VICTIM OF IDENTITY THEFT. (a) In this section: |
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(1) "Check verification entity" means a consumer |
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reporting agency that compiles and maintains, for businesses in |
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this state, files on consumers on a nationwide basis regarding the |
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consumers' check-writing history. |
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(2) "Financial institution" means a bank, savings |
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association, savings bank, or credit union maintaining an office, |
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branch, or agency office in this state. |
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(b) A financial institution shall submit the information as |
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required by Subsection (c) if a customer notifies the financial |
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institution that the customer was a victim of an offense under |
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Section 32.51, Penal Code, and presents to the financial |
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institution: |
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(1) a copy of a police report of an offense under |
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Section 32.51, Penal Code; |
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(2) a sworn statement by the person that the person was |
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the victim of an offense under that section; and |
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(3) written authorization to submit the information |
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required by Subsection (d) to the electronic notification system |
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established under Section 11.309, Finance Code, for secure |
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distribution to check verification entities. |
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(c) A financial institution that receives the documents |
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required by Subsection (b), not later than the second business day |
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after the date the customer provides the documents to the financial |
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institution, shall submit the information required by Subsection |
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(d) to the electronic notification system established under Section |
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11.309, Finance Code. |
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(d) The information submitted by a financial institution |
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under Subsection (c) must include: |
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(1) the customer's name, address, phone number, date |
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of birth, and driver's license number or government-issued |
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identification number; |
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(2) the financial institution account number of any |
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account that has been compromised by the alleged offense; |
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(3) the financial institution routing number; and |
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(4) the number on any check that has been lost, stolen, |
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or compromised. |
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(e) A check verification entity may not recommend |
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acceptance or approval of a check or similar sight order drawn on an |
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account identified in the notification if: |
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(1) the check verification entity receives |
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notification through the electronic notification system; or |
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(2) a customer presents to the check verification |
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entity: |
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(A) a copy of a police report of an offense under |
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Section 32.51, Penal Code; |
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(B) a sworn statement by the person that the |
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person was the victim of an offense under that section; and |
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(C) the information described by Subsection (d). |
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(f) A financial institution or check verification entity, |
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or an officer, director, employee, or agent of the institution or |
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entity, is not liable for damages resulting from providing the |
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notification required by Subsection (c) or failing to recommend |
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acceptance or approval of a check or similar sight order under |
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Subsection (e). |
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(g) The Finance Commission of Texas may adopt rules: |
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(1) to implement this section; |
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(2) to clarify the duties and responsibilities of a |
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customer, financial institution, or check verification entity |
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under this section; and |
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(3) to specify how an erroneous notification may be |
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withdrawn, amended, or corrected. |
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SECTION 2. Subchapter D, Chapter 11, Finance Code, is |
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amended by adding Section 11.309 to read as follows: |
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Sec. 11.309. RULES RELATING TO CHECK VERIFICATION ENTITIES. |
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(a) In this section, "check verification entity" and "financial |
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institution" have the meanings assigned by Section 35.595, Business & |
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Commerce Code. |
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(b) The finance commission shall adopt rules: |
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(1) requiring a check verification entity to register |
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with the banking commissioner: |
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(A) at the intervals the finance commission |
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determines, but not less frequently than annually; and |
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(B) by providing to the banking commissioner the |
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information that the finance commission determines is necessary to |
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enable a financial institution or a check verification entity to |
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comply with the requirements of Section 35.595, Business & Commerce |
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Code; |
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(2) authorizing the banking commissioner to charge a |
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check verification entity a reasonable annual fee, not to exceed |
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$100, to register with the commissioner; and |
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(3) requiring the banking commissioner to establish an |
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electronic notification system, through secure e-mail or another |
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secure system, to be used by a financial institution to notify check |
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verification entities as required by Section 35.595, Business & |
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Commerce Code. |
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(c) The finance commission may not impose a duty on the |
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banking commissioner under Subsection (b)(3) to verify the validity |
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or completeness of information transmitted through the electronic |
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notification system. |
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(d) The banking commissioner may solicit and accept gifts, |
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grants, and donations from public and private entities to establish |
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and maintain the secure notification system. |
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SECTION 3. A financial institution is not required to |
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comply with Section 35.595, Business & Commerce Code, as added by |
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this Act, before March 1, 2008. |
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SECTION 4. This Act takes effect September 1, 2007. |