House Passes Free Credit Freeze Legislation with Unanimous Bipartisan Support

Illinois PIRG

 In a response to the massive Equifax data breach, the Illinois House today passed House Bill 4095, which bars credit reporting agencies from charging consumers a fee to place or lift a freeze on their credit report. The bill, sponsored by Representative Greg Harris, passed with unanimous bipartisan support (109 yes, 0 no). The Senate is expected to take up the legislation when it returns for the second week of veto session in November. Senator Bill Cunningham is the Senate sponsor.

“People should be allowed to freeze their credit without a charge or hassle, particularly when the credit reporting agencies are responsible for compromising their personal information,” Attorney General Lisa Madigan said.

A credit freeze prevents new account identity theft by stopping credit reporting agencies from sharing a consumer’s credit report with potential new creditors. Most creditors will not issue new credit to a customer without a credit report from at least one of the big three credit reporting agencies. Credit monitoring services, often peddled to consumers in the wake of data breaches, provide inferior protection: they only alert consumers once identity theft has occurred.

“Making credit freezes free for all Illinois residents is the first of multiple steps the General Assembly should take to respond to the Equifax breach, which placed an estimated 5.4 million Illinois residents at heightened risk of identity theft,” said Illinois PIRG Director Abe Scarr.

House Bill 4095 makes it easier for consumers to protect themselves from identity theft by eliminating the fees charged by credit reporting agencies to  place or lift a freeze on their credit report. Current state law allows credit reporting agencies to charge consumers $10 to freeze or thaw their credit report; fees are currently waived for residents 65 and older, active service members, and victims of identity theft with a police report. Indiana, Maine, North Carolina and South Carolina already allow all residents to freeze and thaw their credit reports for free. Illinois is on track to be the first state to revise credit freeze laws in response to the Equifax breach.

“Given recent data breaches, there has never been a more critical time for this legislation,” says Jody Blaylock, Senior Policy Associate with Heartland Alliance. “We must ensure that people, especially those experiencing poverty, can protect their credit and continue to build financial security.”

In written testimony provided to a house committee on Wednesday, Illinois PIRG suggested further policy changes the General Assembly should consider in the 2018 legislative session, including making credit reports frozen by default, creating a one stop shop where consumers can freeze their report with the three major credit reporting agencies at once, and shortening the time credit reporting agencies have to respond to a freeze request from days to minutes.

The free credit freeze legislation is supported by Attorney General Lisa Madigan, AARP, Center for Changing Lives, Citizen Action Illinois, Digital Privacy Alliance, Heartland Alliance, Housing Action Illinois, Illinois PIRG, Navicore Solutions, Working Credit and Woodstock Institute.