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CONSUMER FINANCE HEADLINES & DEADLINES FOR OUR CLIENTS AND FRIENDS
Topics – Covered This Week (Click to View)
FEDERAL ISSUES
SEC Clarifies FAS 140 Regarding Mortgage Modifications. On July 25, Securities and Exchange Commission (SEC) issued a memorandum outlining its position that FAS 140 does not disallow, subject to certain limitations, off-balance sheet modifications of mortgages facing “reasonably foreseeable” default. The memorandum comes in response to a letter submitted by several members of the House Financial Services Committee (reported in the June 22nd issue of InfoBytes), in which the Congressmen expressed concern that lack of clarity in the FAS 140 accounting standard governing securitizations “may be leading some institutions to withhold making loan modifications that may benefit borrowers – and bondholders.” The SEC stated that no additional formal interpretive guidance is needed to address the role of FAS 140 in modifications, citing a “consensus in practice” on the topic in the industry. For the official Financial Services Committee press release, please see http://www.house.gov/apps/list/press/financialsvcs_dem/press072507.shtml.
FTC Issues Report on Credit-Score Insurance Pricing Finding Small Racial Bias. On July 24, the Federal Trade Commission (FTC) released a report to Congress entitled “Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance,” which found credit score-based pricing “appear[s] to have little effect as a ‘proxy’ for membership in racial and ethnic groups.” The report found that credit scores were a good indicator of subsequent claims filings, though pricing models using the scores increased the predicted risk of African Americans by 1.1% and Hispanics by .7% relative to models without a credit score component. The Fair and Accurate Credit Transactions Act (FACTA)-mandated report was submitted to Congress with a statement of support from three of the FTC’s five commissioners. Commissioner Leibowitz cast a fourth vote in favor of the report, but gave a “concurring statement” stating the report was “no cause for celebration” and that in the face the documented racial disparities “we can, and must, do more.” Commissioner Harbour voted against submitting the report and issued a dissenting statement arguing that while the report was the “best possible work” by the FTC’s economists, the data used seemed “incomplete and unreliable.” Because the report relied on public data and “data the insurance industry was willing to turn over voluntarily,” and because the insurance companies would not formally authenticate the accuracy of the data, the commissioner felt that “it is unclear whether the actual proxy effect might be greater.” Following the report’s release, several consumer advocacy organizations, including National Consumer Law Center, issued a joint press release condemning the report as “biased industry propaganda.” For the official FTC press release, please see http://www.ftc.gov/opa/2007/07/facta.shtm.
Senate Passes Amended Student Loan Bill. On July 20, the Senate passed its version of the “Higher Education Access Act of 2007” (H.R. 2669) which would, among other things, reduce student lender compensation, as well as the rates paid by borrowers, while increasing federal grants to students (most recently covered in the June 22nd issue of InfoBytes). The House’s version of this bill was passed on July 11 and was brought swiftly to the floor upon motion by Senate Majority Leader Harry Reid (D – NV). The bill passed, by a vote of 78 to 18, with several amendments. The House and Senate versions must now be reconciled. For more information on H.R. 2669, please see http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.2669.eas:.
House Financial Services Committee Holds Hearings on HMDA. On July 25, the House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing on “Using HMDA as a Tool for Fair Lending Enforcement.” Representatives of the FRB, FDIC, OTS, OCC, NCUA, OFHEO, FTC, and the Department of Justice testified, as well as representatives of several consumer advocacy groups, including the National Community Reinvestment Coalition, which has pursued several suits under the Fair Housing Act using Home Mortgage Disclosure Act (HMDA) data (most recently reported in the June 15th issue of InfoBytes). Testimony ranged from topics on regulators’ legal authority under HMDA to collect data to the appropriate use and effectiveness of using HMDA data for enforcement actions and suits. For more information on this hearing, please see http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht072507.shtml.
FHA Allows HECMs and ARMs to Use LIBOR Index. On July 20, the Federal Register published a new Department of Housing and Urban Development (HUD) rule permitting Federal Housing Administration (FHA)-insured one- to ten-year Adjustable Rate Mortgages (ARM) to be indexed to the one-year London Interbank Offered Rate (LIBOR). FHA-insured Home Equity Conversion Mortgages (HECM) are permitted to be indexed to the one-month LIBOR and the one-year LIBOR. Current FHA regulations only permit the weekly average yield of U.S. Treasury securities to be used to adjust interest rates on FHA-insured ARM and HECM. Mortgage lenders that do not wish to use the LIBOR indices are free to continue using the adjusted U.S. Treasury securities rates. FHA was encouraged to adopt the international LIBOR indices partly due to their use in the secondary mortgage market. The full text of the regulation, including comments, can be found at http://www.hudclips.org/sub_nonhud/cgi/pdf/14030b.pdf.
Bernanke Prefers State Regulation of Brokers. On July 19, Federal Reserve Board (FRB) Chairman Ben Bernanke presented a monetary policy report to the Senate Banking Committee. During the question and answer phase, he suggested a preference for state-level regulation of mortgage brokers. When asked about his views on possible federal legislation regarding mortgage brokers he said that, due to the states’ prominent, and often dominant, role in regulating brokers, it would be better if brokers fell under state regulation. In his prepared remarks, Chairman Bernanke also discussed the importance of state and federal level cooperation on enforcement and supervision in the mortgage industry. For more information on this hearing, please see http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=271.
STATE ISSUES
Massachusetts Increases Education, Experience Requirements for Lenders and Brokers. On July 2, the Massachusetts Division of Banks adopted several amendments to Regulatory Bulletin 5.1-102, which outlines the education and experience requirements for applicants seeking a mortgage broker, lender, or branch manager license. The new rules require applicants for a mortgage broker license to have three years of full-time experience working for a licensed entity or an entity exempt from licensing. Applicants for a mortgage lender license must have five years of such experience. Individuals designated as a Branch Manager of a mortgage broker or a mortgage lender must have three years of such experience. Any time spent working for an unlicensed, non-exempt entity will not count toward the state’s experience requirements. The Bulletin does not apply to applicants seeking renewal of their license. A copy of the bulletin can be found on the regulator’s website, at http://www.mass.gov/dob.
Oregon Credit Freeze Bill Signed Into Law. On July 12, Oregon Governor Theodore Kulongoski signed into law the Oregon Consumer Identity Theft Protection Act (S.B. 583) requiring that state residents be notified in the event of a data breach involving their computerized personal information. The law, which becomes effective October 1, permits state residents to place a security freeze on their credit reports following such a breach. Credit reporting firms have five business days to comply with a security freeze request, and three business days to comply with a request to either remove or temporarily lift a security freeze. Oregon residents may be charged up to $10 for any of these services, except that an identity theft victim may not be charged. S.B. 583 additionally lays out restrictions pertaining to the use of an individual’s social security number and requires certain businesses and government agencies to implement a data security program. To view S.B. 583 as signed by Governor Kulongoski, please see http://www.leg.state.or.us/07reg/measures/sb0500.dir/sb0583.en.html.
COURTS
District Court Again Approves Class Settlement in TILA, FCRA Case. For the third time, a federal district court has approved the settlement of the Mirfasihi nationwide class action lawsuit. Mirfasihi v. Fleet Mortgage Corp., No. 01 C 722, 2007 WL 2066503 (N.D. Ill. July 17, 2007). In this case, customers alleged that Fleet Mortgage sold customer information for up to 1.6 million customers to third-party telemarketers in violation of TILA, FCRA, and various state consumer protection laws. Twice before, the district court has approved a settlement, but the Seventh Circuit Court of Appeals struck down the settlement both times (see the June 23, 2006 issue of InfoBytes). In this most recent development, the district court had been ordered to consider state-law remedies that might be available in all 50 states to the approximately 1.4 million “information sharing” class members who suffered no actual damages as a result of the data sharing. In the previous settlement, these plaintiffs had not been awarded any recovery. After reviewing consumer protection and privacy laws in all 50 states, the district court concluded that “the information-sharing plaintiffs do not have any realistic prospect of recovery under any applicable law.” Thus, the settlement was once again approved. For a copy of the opinion, please contact .
Forum Selection Clause Designating Forum without Class Relief Held Unenforceable. In a unanimous decision, the Washington Supreme Court refused to enforce a forum selection clause that effectively foreclosed class relief for plaintiffs. Dix v. ICT Group, Inc., No. 77101-4 (Wa., opinion filed July 12, 2007). The Dix plaintiffs sued AOL and its customer service provider for allegedly creating and charging for additional unauthorized membership accounts. The suit was brought as a class action in the State of Washington, asserting claims under the Washington Consumer Protection Act (WCPA), and alleging damages of between $24 and $250 per class member. The trial court dismissed the suit, finding that the forum selection clause contained in the AOL Terms of Service Agreement required that such suits be brought in Virginia. The Court of Appeals reversed and the Washington Supreme Court agreed, both refusing to enforce the forum selection clause because Virginia law does not provide for class actions. The Supreme Court reasoned that enforcing the forum selection clause would foreclose class adjudication of the WCPA claims, which would effectively prevent any enforcement of the WCPA because of the relatively small damages at issue. According to the court, “[g]iven the importance of the private right of action to enforce the [W]CPA for the protection of all the citizens of the state, we conclude that a forum selection clause that seriously impairs a plaintiff’s ability to bring suit to enforce the [W]CPA violates the public policy of this state.” For a copy of this decision, see http://www.courts.wa.gov/opinions/pdf/771014.opn.pdf.
Labor Union May Have Violated CAN-SPAM with Solicitation E-mails. On July 12, the U.S. District Court for the Eastern District of Virginia held, on a motion to dismiss, that the Communication Workers of America (CWA) could have violated the CAN-SPAM Act. The CWA used Yahoo! accounts to send emails to Verizon employees soliciting union membership. The emails, however, were designed to appear as though they came from Verizon managers. Aitken v. Communications Workers of America, No. 1:06cv1611 (E.D. Va. Jul. 12, 2007). Some of the e-mails, among other things, allegedly purported to be sent by the Verizon managers (who did not authorize the creation of the e-mail accounts in their name), did not indicate how the recipients might opt-out of receiving future e-mails, failed to contain a valid physical postal address and contained misleading header information. The defendants claimed, among other things, that the e-mails were not “commercial” speech and did not fall within the act’s reach. The court disagreed, noting that the e-mails promoted union membership, which could be a commercial relationship. Moreover, the court stated that the e-mails could be fraudulent and misleading. Accordingly, the court refused the defendants’ motion to dismiss. Please contact for a copy of this decision.
FIRM NEWS
Joseph Lynyak was quoted in an article entitled “HMDA Suits Backdrop for Committee Hearings: Class actions mount; ‘exactly what the industry’ had feared” in the July 25th issue of the American Banker. Mr. Lynyak is quoted discussing the insufficiency of HMDA data in evaluating the nature of lending decisions, as it excludes some of the most vital underwriting criteria. “When you apply credit data to the HMDA data, you see an entirely different picture of how people are treated and whether they are treated fairly.”
Robert Serino was quoted in an July 20th American Banker article entitled “Agencies Give Unified BSA Guidance” discussing how financial institutions would aided by recent joint federal banking agency guidance. While “there is potential for second guessing” it gives financial institutions “the opportunity to present to the agency why” a problem might not be the fault of the compliance program, by showing it meets the standards set forth.
SEC Clarifies FAS 140 Regarding Mortgage Modifications. On July 25, Securities and Exchange Commission (SEC) issued a memorandum outlining its position that FAS 140 does not disallow, subject to certain limitations, off-balance sheet modifications of mortgages facing “reasonably foreseeable” default. The memorandum comes in response to a letter submitted by several members of the House Financial Services Committee (reported in the June 22nd issue of InfoBytes), in which the Congressmen expressed concern that lack of clarity in the FAS 140 accounting standard governing securitizations “may be leading some institutions to withhold making loan modifications that may benefit borrowers – and bondholders.” The SEC stated that no additional formal interpretive guidance is needed to address the role of FAS 140 in modifications, citing a “consensus in practice” on the topic in the industry. For the official Financial Services Committee press release, please see http://www.house.gov/apps/list/press/financialsvcs_dem/press072507.shtml.
District Court Again Approves Class Settlement in TILA, FCRA Case. For the third time, a federal district court has approved the settlement of the Mirfasihi nationwide class action lawsuit. Mirfasihi v. Fleet Mortgage Corp., No. 01 C 722, 2007 WL 2066503 (N.D. Ill. July 17, 2007). In this case, customers alleged that Fleet Mortgage sold customer information for up to 1.6 million customers to third-party telemarketers in violation of TILA, FCRA, and various state consumer protection laws. Twice before, the district court has approved a settlement, but the Seventh Circuit Court of Appeals struck down the settlement both times (see the June 23, 2006 issue of InfoBytes). In this most recent development, the district court had been ordered to consider state-law remedies that might be available in all 50 states to the approximately 1.4 million “information sharing” class members who suffered no actual damages as a result of the data sharing. In the previous settlement, these plaintiffs had not been awarded any recovery. After reviewing consumer protection and privacy laws in all 50 states, the district court concluded that “the information-sharing plaintiffs do not have any realistic prospect of recovery under any applicable law.” Thus, the settlement was once again approved. For a copy of the opinion, please contact .
Massachusetts Increases Education, Experience Requirements for Lenders and Brokers. On July 2, the Massachusetts Division of Banks adopted several amendments to Regulatory Bulletin 5.1-102, which outlines the education and experience requirements for applicants seeking a mortgage broker, lender, or branch manager license. The new rules require applicants for a mortgage broker license to have three years of full-time experience working for a licensed entity or an entity exempt from licensing. Applicants for a mortgage lender license must have five years of such experience. Individuals designated as a Branch Manager of a mortgage broker or a mortgage lender must have three years of such experience. Any time spent working for an unlicensed, non-exempt entity will not count toward the state’s experience requirements. The Bulletin does not apply to applicants seeking renewal of their license. A copy of the bulletin can be found on the regulator’s website, at http://www.mass.gov/dob.
House Financial Services Committee Holds Hearings on HMDA. On July 25, the House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing on “Using HMDA as a Tool for Fair Lending Enforcement.” Representatives of the FRB, FDIC, OTS, OCC, NCUA, OFHEO, FTC, and the Department of Justice testified, as well as representatives of several consumer advocacy groups, including the National Community Reinvestment Coalition, which has pursued several suits under the Fair Housing Act using Home Mortgage Disclosure Act (HMDA) data (most recently reported in the June 15th issue of InfoBytes). Testimony ranged from topics on regulators’ legal authority under HMDA to collect data to the appropriate use and effectiveness of using HMDA data for enforcement actions and suits. For more information on this hearing, please see http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht072507.shtml.
FHA Allows HECMs and ARMs to Use LIBOR Index. On July 20, the Federal Register published a new Department of Housing and Urban Development (HUD) rule permitting Federal Housing Administration (FHA)-insured one- to ten-year Adjustable Rate Mortgages (ARM) to be indexed to the one-year London Interbank Offered Rate (LIBOR). FHA-insured Home Equity Conversion Mortgages (HECM) are permitted to be indexed to the one-month LIBOR and the one-year LIBOR. Current FHA regulations only permit the weekly average yield of U.S. Treasury securities to be used to adjust interest rates on FHA-insured ARM and HECM. Mortgage lenders that do not wish to use the LIBOR indices are free to continue using the adjusted U.S. Treasury securities rates. FHA was encouraged to adopt the international LIBOR indices partly due to their use in the secondary mortgage market. The full text of the regulation, including comments, can be found at http://www.hudclips.org/sub_nonhud/cgi/pdf/14030b.pdf.
Bernanke Prefers State Regulation of Brokers. On July 19, Federal Reserve Board (FRB) Chairman Ben Bernanke presented a monetary policy report to the Senate Banking Committee. During the question and answer phase, he suggested a preference for state-level regulation of mortgage brokers. When asked about his views on possible federal legislation regarding mortgage brokers he said that, due to the states’ prominent, and often dominant, role in regulating brokers, it would be better if brokers fell under state regulation. In his prepared remarks, Chairman Bernanke also discussed the importance of state and federal level cooperation on enforcement and supervision in the mortgage industry. For more information on this hearing, please see http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=271.
SEC Clarifies FAS 140 Regarding Mortgage Modifications. On July 25, Securities and Exchange Commission (SEC) issued a memorandum outlining its position that FAS 140 does not disallow, subject to certain limitations, off-balance sheet modifications of mortgages facing “reasonably foreseeable” default. The memorandum comes in response to a letter submitted by several members of the House Financial Services Committee (reported in the June 22nd issue of InfoBytes), in which the Congressmen expressed concern that lack of clarity in the FAS 140 accounting standard governing securitizations “may be leading some institutions to withhold making loan modifications that may benefit borrowers – and bondholders.” The SEC stated that no additional formal interpretive guidance is needed to address the role of FAS 140 in modifications, citing a “consensus in practice” on the topic in the industry. For the official Financial Services Committee press release, please see http://www.house.gov/apps/list/press/financialsvcs_dem/press072507.shtml.
House Financial Services Committee Holds Hearings on HMDA. On July 25, the House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing on “Using HMDA as a Tool for Fair Lending Enforcement.” Representatives of the FRB, FDIC, OTS, OCC, NCUA, OFHEO, FTC, and the Department of Justice testified, as well as representatives of several consumer advocacy groups, including the National Community Reinvestment Coalition, which has pursued several suits under the Fair Housing Act using Home Mortgage Disclosure Act (HMDA) data (most recently reported in the June 15th issue of InfoBytes). Testimony ranged from topics on regulators’ legal authority under HMDA to collect data to the appropriate use and effectiveness of using HMDA data for enforcement actions and suits. For more information on this hearing, please see http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht072507.shtml.
Senate Passes Amended Student Loan Bill. On July 20, the Senate passed its version of the “Higher Education Access Act of 2007” (H.R. 2669) which would, among other things, reduce student lender compensation, as well as the rates paid by borrowers, while increasing federal grants to students (most recently covered in the June 22nd issue of InfoBytes). The House’s version of this bill was passed on July 11 and was brought swiftly to the floor upon motion by Senate Majority Leader Harry Reid (D – NV). The bill passed, by a vote of 78 to 18, with several amendments. The House and Senate versions must now be reconciled. For more information on H.R. 2669, please see http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.2669.eas:.
District Court Again Approves Class Settlement in TILA, FCRA Case. For the third time, a federal district court has approved the settlement of the Mirfasihi nationwide class action lawsuit. Mirfasihi v. Fleet Mortgage Corp., No. 01 C 722, 2007 WL 2066503 (N.D. Ill. July 17, 2007). In this case, customers alleged that Fleet Mortgage sold customer information for up to 1.6 million customers to third-party telemarketers in violation of TILA, FCRA, and various state consumer protection laws. Twice before, the district court has approved a settlement, but the Seventh Circuit Court of Appeals struck down the settlement both times (see the June 23, 2006 issue of InfoBytes). In this most recent development, the district court had been ordered to consider state-law remedies that might be available in all 50 states to the approximately 1.4 million “information sharing” class members who suffered no actual damages as a result of the data sharing. In the previous settlement, these plaintiffs had not been awarded any recovery. After reviewing consumer protection and privacy laws in all 50 states, the district court concluded that “the information-sharing plaintiffs do not have any realistic prospect of recovery under any applicable law.” Thus, the settlement was once again approved. For a copy of the opinion, please contact .
Forum Selection Clause Designating Forum without Class Relief Held Unenforceable. In a unanimous decision, the Washington Supreme Court refused to enforce a forum selection clause that effectively foreclosed class relief for plaintiffs. Dix v. ICT Group, Inc., No. 77101-4 (Wa., opinion filed July 12, 2007). The Dix plaintiffs sued AOL and its customer service provider for allegedly creating and charging for additional unauthorized membership accounts. The suit was brought as a class action in the State of Washington, asserting claims under the Washington Consumer Protection Act (WCPA), and alleging damages of between $24 and $250 per class member. The trial court dismissed the suit, finding that the forum selection clause contained in the AOL Terms of Service Agreement required that such suits be brought in Virginia. The Court of Appeals reversed and the Washington Supreme Court agreed, both refusing to enforce the forum selection clause because Virginia law does not provide for class actions. The Supreme Court reasoned that enforcing the forum selection clause would foreclose class adjudication of the WCPA claims, which would effectively prevent any enforcement of the WCPA because of the relatively small damages at issue. According to the court, “[g]iven the importance of the private right of action to enforce the [W]CPA for the protection of all the citizens of the state, we conclude that a forum selection clause that seriously impairs a plaintiff’s ability to bring suit to enforce the [W]CPA violates the public policy of this state.” For a copy of this decision, see http://www.courts.wa.gov/opinions/pdf/771014.opn.pdf.
Labor Union May Have Violated CAN-SPAM with Solicitation E-mails. On July 12, the U.S. District Court for the Eastern District of Virginia held, on a motion to dismiss, that the Communication Workers of America (CWA) could have violated the CAN-SPAM Act. The CWA used Yahoo! accounts to send emails to Verizon employees soliciting union membership. The emails, however, were designed to appear as though they came from Verizon managers. Aitken v. Communications Workers of America, No. 1:06cv1611 (E.D. Va. Jul. 12, 2007). Some of the e-mails, among other things, allegedly purported to be sent by the Verizon managers (who did not authorize the creation of the e-mail accounts in their name), did not indicate how the recipients might opt-out of receiving future e-mails, failed to contain a valid physical postal address and contained misleading header information. The defendants claimed, among other things, that the e-mails were not “commercial” speech and did not fall within the act’s reach. The court disagreed, noting that the e-mails promoted union membership, which could be a commercial relationship. Moreover, the court stated that the e-mails could be fraudulent and misleading. Accordingly, the court refused the defendants’ motion to dismiss. Please contact for a copy of this decision.
FTC Issues Report on Credit-Score Insurance Pricing Finding Small Racial Bias. On July 24, the Federal Trade Commission (FTC) released a report to Congress entitled “Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance,” which found credit score-based pricing “appear[s] to have little effect as a ‘proxy’ for membership in racial and ethnic groups.” The report found that credit scores were a good indicator of subsequent claims filings, though pricing models using the scores increased the predicted risk of African Americans by 1.1% and Hispanics by .7% relative to models without a credit score component. The Fair and Accurate Credit Transactions Act (FACTA)-mandated report was submitted to Congress with a statement of support from three of the FTC’s five commissioners. Commissioner Leibowitz cast a fourth vote in favor of the report, but gave a “concurring statement” stating the report was “no cause for celebration” and that in the face the documented racial disparities “we can, and must, do more.” Commissioner Harbour voted against submitting the report and issued a dissenting statement arguing that while the report was the “best possible work” by the FTC’s economists, the data used seemed “incomplete and unreliable.” Because the report relied on public data and “data the insurance industry was willing to turn over voluntarily,” and because the insurance companies would not formally authenticate the accuracy of the data, the commissioner felt that “it is unclear whether the actual proxy effect might be greater.” Following the report’s release, several consumer advocacy organizations, including National Consumer Law Center, issued a joint press release condemning the report as “biased industry propaganda.” For the official FTC press release, please see http://www.ftc.gov/opa/2007/07/facta.shtm.
Labor Union May Have Violated CAN-SPAM with Solicitation E-mails. On July 12, the U.S. District Court for the Eastern District of Virginia held, on a motion to dismiss, that the Communication Workers of America (CWA) could have violated the CAN-SPAM Act. The CWA used Yahoo! accounts to send emails to Verizon employees soliciting union membership. The emails, however, were designed to appear as though they came from Verizon managers. Aitken v. Communications Workers of America, No. 1:06cv1611 (E.D. Va. Jul. 12, 2007). Some of the e-mails, among other things, allegedly purported to be sent by the Verizon managers (who did not authorize the creation of the e-mail accounts in their name), did not indicate how the recipients might opt-out of receiving future e-mails, failed to contain a valid physical postal address and contained misleading header information. The defendants claimed, among other things, that the e-mails were not “commercial” speech and did not fall within the act’s reach. The court disagreed, noting that the e-mails promoted union membership, which could be a commercial relationship. Moreover, the court stated that the e-mails could be fraudulent and misleading. Accordingly, the court refused the defendants’ motion to dismiss. Please contact for a copy of this decision.
Oregon Credit Freeze Bill Signed Into Law. On July 12, Oregon Governor Theodore Kulongoski signed into law the Oregon Consumer Identity Theft Protection Act (S.B. 583) requiring that state residents be notified in the event of a data breach involving their computerized personal information. The law, which becomes effective October 1, permits state residents to place a security freeze on their credit reports following such a breach. Credit reporting firms have five business days to comply with a security freeze request, and three business days to comply with a request to either remove or temporarily lift a security freeze. Oregon residents may be charged up to $10 for any of these services, except that an identity theft victim may not be charged. S.B. 583 additionally lays out restrictions pertaining to the use of an individual’s social security number and requires certain businesses and government agencies to implement a data security program. To view S.B. 583 as signed by Governor Kulongoski, please see http://www.leg.state.or.us/07reg/measures/sb0500.dir/sb0583.en.html.
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