CHAPTER 523. PROVISIONS RELATING TO VICTIMS OF IDENTITY THEFT

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Statutes > Texas > Business-and-commerce-code > Title-11-personal-identity-information > Chapter-523-provisions-relating-to-victims-of-identity-theft

BUSINESS AND COMMERCE CODE

TITLE 11. PERSONAL IDENTITY INFORMATION

SUBTITLE B. IDENTITY THEFT

CHAPTER 523. PROVISIONS RELATING TO VICTIMS OF IDENTITY THEFT

SUBCHAPTER A. EXTENSIONS OF CREDIT AND VERIFICATION

OF IDENTITY

Sec. 523.001. EXTENSION OF CREDIT TO VICTIM OF IDENTITY THEFT.

(a) In this section, "victim of identity theft" means an

individual who has filed a criminal complaint alleging the

commission of an offense under Section 32.51, Penal Code, other

than a person who is convicted of an offense under Section 37.08,

Penal Code, with respect to that complaint.

(b) A person who has been notified that an individual has been

the victim of identity theft may not deny the individual an

extension of credit, including a loan, in the individual's name

or restrict or limit the credit extended solely because the

individual has been a victim of identity theft. This subsection

does not prohibit a person from denying an individual an

extension of credit for a reason other than the individual's

having been a victim of identity theft, including by reason of

the individual's lack of capacity to contract.

that is held by a person who violates this section is subject to

revocation or suspension under that subtitle.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 523.002. VERIFICATION OF CONSUMER IDENTITY. (a) In this

section:

(1) "Consumer report" has the meaning assigned by Section 20.01.

(2) "Extension of credit" does not include:

(A) an increase in the dollar limit of an existing open-end

credit plan as defined by federal Regulation Z (12 C.F.R. Section

226.2), as amended; or

(B) any change to, or review of, an existing credit account.

(3) "Security alert" has the meaning assigned by Section 20.01.

(b) A person who receives notification of a security alert under

Section 20.032 in connection with a request for a consumer report

for the approval of a credit-based application, including an

application for an extension of credit, a purchase, lease, or

rental agreement for goods, or for an application for a

noncredit-related service, may not lend money, extend credit, or

authorize an application without taking reasonable steps to

verify the consumer's identity.

telephone number to be used for identity verification purposes, a

person who receives that number with a security alert must take

reasonable steps to contact the consumer using that number before

lending money, extending credit, or completing any purchase,

lease, or rental of goods, or approving any noncredit-related

services.

(d) If a person uses a consumer report to facilitate the

extension of credit or for any other transaction on behalf of a

subsidiary, affiliate, agent, assignee, or prospective assignee,

that person, rather than the subsidiary, affiliate, agent,

assignee, or prospective assignee, may verify the consumer's

identity.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

SUBCHAPTER B. DUTIES OF FINANCIAL INSTITUTIONS AND

OF VERIFICATION ENTITIES

Sec. 523.051. NOTATION OF FORGED CHECK. (a) In this section,

"victim of identity theft" means a person who has filed with an

appropriate law enforcement agency a criminal complaint alleging

commission of an offense under Section 32.51, Penal Code.

(b) A financial institution, in accordance with its customary

procedures, shall process as forgeries checks received on the

account of a victim of identity theft if the victim:

(1) closes the account at the financial institution as a result

of the identity theft;

(2) notifies the financial institution that the identity theft

is the reason for closing the account;

(3) provides the financial institution with a copy of the

criminal complaint described by Subsection (a); and

(4) requests that the financial institution return checks with

the notation "forgery."

institution return checks with the notation "forgery" as provided

by Subsection (b):

(1) may not assert that the financial institution is liable

under Section 4.402 for wrongfully dishonoring a check returned

after the victim makes the request; and

(2) shall hold the financial institution harmless for acting in

accordance with the victim's request.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Redesignated from Business and Commerce Code, Section 523.003 by

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 4.011(b), eff. September 1, 2009.

Sec. 523.052. NOTIFICATION TO CHECK VERIFICATION ENTITIES THAT

CUSTOMER IS VICTIM OF IDENTITY THEFT. (a) In this section:

(1) "Check verification entity" means a consumer reporting

agency that compiles and maintains, for businesses in this state,

files on consumers on a nationwide basis regarding the consumers'

check-writing history.

(2) "Financial institution" means a bank, savings association,

savings bank, or credit union maintaining an office, branch, or

agency office in this state.

(b) A financial institution shall submit the information as

required by Subsection (c) if a customer notifies the financial

institution that the customer was a victim of an offense under

Section 32.51, Penal Code, requests that the financial

institution close an account that has been compromised by the

alleged offense, and presents to the financial institution:

(1) a copy of a police report of an offense under Section 32.51,

Penal Code;

(2) a sworn statement by the person that the person was the

victim of an offense under that section; and

(3) written authorization to submit the information required by

Subsection (d) to the electronic notification system established

under Section 11.309, Finance Code, for secure distribution to

check verification entities.

by Subsection (b), not later than the second business day after

the date the customer provides the documents to the financial

institution, shall submit the information required by Subsection

(d) to the electronic notification system established under

Section 11.309, Finance Code.

(d) The information submitted by a financial institution under

Subsection (c) must include:

(1) the customer's name, address, phone number, date of birth,

and driver's license number or government-issued identification

number;

(2) the financial institution account number of any account that

has been compromised by the alleged offense and has been closed

in response to the alleged offense;

(3) the financial institution routing number; and

(4) the number on any check that has been lost, stolen, or

compromised.

(e) A check verification entity shall maintain reasonable

procedures, in accordance with rules adopted by the finance

commission, to prevent the check verification entity from

recommending acceptance or approval of a check or similar sight

order drawn on an account identified in the notification if:

(1) the check verification entity receives notification through

the electronic notification system; or

(2) a customer presents to the check verification entity:

(A) a copy of a police report of an offense under Section 32.51,

Penal Code;

(B) a sworn statement by the person that the person was the

victim of an offense under that section and that the person has

requested that the financial institution close any account that

has been compromised by the alleged offense; and

(f) A financial institution or check verification entity, or an

officer, director, employee, or agent of the institution or

entity, is not liable for damages resulting from providing the

notification required by Subsection (c) or failing to recommend

acceptance or approval of a check or similar sight order under

Subsection (e).

(g) The Finance Commission of Texas may adopt rules:

(1) to implement this section;

(2) to clarify the duties and responsibilities of a customer,

financial institution, or check verification entity under this

section; and

(3) to specify how an erroneous notification may be withdrawn,

amended, or corrected.

Added by Acts 2007, 80th Leg., R.S., Ch.

1044, Sec. 1, eff. September 1, 2007.

Transferred from Business and Commerce Code, Section 35.595 by

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 4.011(c), eff. September 2, 2009.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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