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A BILL TO BE ENTITLED
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AN ACT
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relating to a consumer's option to prevent the sale of the |
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consumer's financial information by a financial institution; |
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providing for civil liability. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by |
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adding Chapter 279 to read as follows: |
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CHAPTER 279. SALE OF CONSUMER'S FINANCIAL INFORMATION |
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Sec. 279.001. DEFINITIONS. In this chapter: |
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(1) "Affiliate" with respect to a person means another |
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person who controls, is controlled by, or is under common control |
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with the person. In this subdivision, "control" means the |
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possession, directly or indirectly, of the power to direct or cause |
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the direction of the management and policies of a person, whether |
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through the ownership of voting securities, by contract, or |
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otherwise. |
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(2) "Consumer" means an individual resident of this |
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state, or the legal representative of an individual resident of |
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this state, who obtains a financial product or service for |
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personal, family, or household purposes. |
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(3) "Financial information" means information, other |
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than information that a financial institution has a reasonable |
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basis to believe is lawfully made available to the general public, |
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obtained by a financial institution in connection with providing a |
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financial product or service to a consumer, including: |
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(A) information provided on an application for a |
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loan, credit card, or other financial product or service; |
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(B) account balance information; |
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(C) payment or overdraft history; |
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(D) credit or debit purchase information; |
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(E) information obtained in connection with |
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collecting on or servicing a loan; or |
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(F) information from a consumer report. |
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(4) "Financial institution" has the meaning assigned |
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by Section 201.101. |
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Sec. 279.002. APPLICABILITY. This chapter does not apply |
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to: |
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(1) the sale of information that is incidental to a |
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transaction having a primary purpose other than the sale of |
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information, including the sale of a loan or of a business; or |
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(2) the disclosure of information to: |
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(A) a private collection agency for the purpose |
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of collecting a delinquent payment; |
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(B) a federal, state, or local governmental |
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entity for a legitimate governmental purpose; or |
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(C) a private vendor as necessary to allow the |
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vendor to perform a service for the governmental entity under a |
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contract with the governmental entity. |
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Sec. 279.003. AUTHORIZATION REQUIRED FOR SALE OF FINANCIAL |
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INFORMATION. (a) A financial institution may sell a consumer's |
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financial information to another person only if the consumer |
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authorizes the sale of the information as provided by this chapter. |
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(b) A financial institution may sell a consumer's financial |
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information without the consumer's authorization to an affiliate of |
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the financial institution. |
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(c) A financial institution may sell a consumer's financial |
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information to another financial institution for the purpose of |
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marketing the financial institution's products or services offered |
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under a joint agreement between the institutions without the |
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authorization required by Subsection (a) if the selling financial |
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institution is required to notify the consumer of the disclosure of |
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the information under the Gramm-Leach-Bliley Act (15 U.S.C. Section |
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6802(b)(2). |
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(d) An affiliate or financial institution that receives a |
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consumer's financial information under Subsection (b) or (c) may |
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sell the information to a person who is not an affiliate of that |
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affiliate or financial institution only if the consumer authorizes |
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that affiliate or financial institution to sell the information as |
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provided by this chapter. |
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Sec. 279.004. PRIVACY NOTICE AND AUTHORIZATION FOR SALE. |
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(a) A financial institution shall provide a written privacy notice |
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to: |
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(1) each consumer who is transacting business with or |
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using the services of the financial institution; and |
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(2) a consumer who begins a relationship with the |
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financial institution at the time the financial institution first |
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communicates in writing or in person with the consumer. |
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(b) The privacy notice shall: |
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(1) be in at least 10-point type that is boldfaced, |
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capitalized, or underlined or otherwise conspicuously set out from |
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the surrounding written material; |
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(2) inform the consumer that the financial institution |
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may not sell the consumer's financial information if the consumer |
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does not authorize the sale of the information; and |
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(3) provide a form that the consumer may sign and |
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return to the financial institution to indicate that the consumer |
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authorizes the financial institution to sell the consumer's |
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financial information. |
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(c) A financial institution may sell a consumer's financial |
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information only after the financial institution receives the form |
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authorizing the sale of the information. |
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(d) A financial institution that does not sell a consumer's |
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financial information to a person other than an affiliate of the |
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financial institution is not required to provide a privacy notice |
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to a consumer under this section. A financial institution that does |
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not sell a consumer's financial information to a person other than |
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another financial institution under a joint agreement as provided |
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by Section 279.003(c) is not required to provide a privacy notice |
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under this section but must provide any similar notice required by |
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other law. |
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Sec. 279.005. WITHDRAWAL OF AUTHORIZATION FOR SALE OF |
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INFORMATION. A consumer who has authorized the sale of financial |
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information under Section 279.004 may at any time withdraw the |
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authorization in writing. The withdrawal of an authorization is |
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effective on the date the financial institution receives the |
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withdrawal. |
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Sec. 279.006. JOINT RELATIONSHIPS. (a) If two or more |
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consumers jointly obtain a financial product or service, the |
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financial institution may provide a privacy notice to one or all of |
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the consumers. |
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(b) If a consumer authorizes the sale of the consumer's |
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financial information as provided by this chapter, the financial |
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institution may sell any financial information relating to that |
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consumer, including information relating to a jointly obtained |
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product or service. |
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(c) If a consumer who does not authorize the sale of the |
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consumer's financial information as required by this chapter |
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jointly obtains a financial product or service with another |
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consumer who has authorized the sale, the financial institution may |
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sell only the financial information of the first consumer that |
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relates to the jointly obtained product or service. |
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Sec. 279.007. FINANCIAL INSTITUTION MAY NOT REQUIRE |
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AUTHORIZATION. A financial institution may not require a |
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consumer's authorization for the sale of the consumer's financial |
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information as a condition of doing business with the financial |
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institution. A consent or waiver obtained from a consumer as a |
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condition of doing business with a financial institution is not |
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valid. |
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Sec. 279.008. LIABILITY. A person is liable to a consumer |
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for an intentional violation of this chapter in an amount equal to |
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the greater of: |
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(1) $1,000; or |
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(2) actual damages caused by the sale of the financial |
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information. |
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SECTION 2. (a) A financial institution shall provide each |
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person who is transacting business with or using the services of the |
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financial institution on the effective date of this Act a privacy |
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notice as required by Section 279.004, Finance Code, as added by |
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this Act, not later than the 60th day after the effective date of |
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this Act. |
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(b) A financial institution may not sell a consumer's |
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financial information after the 180th day after the effective date |
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of this Act unless authorized by the consumer under Chapter 279, |
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Finance Code, as added by this Act. For purposes of this |
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subsection, a sale occurs on the earlier of the date an enforceable |
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agreement to sell information is made or the date the information is |
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sold. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |