"Basing someone's credit score on who they know is not only an invasion of privacy, it is a way for these agencies to unfairly target and penalize low-income New Yorkers," Governor Cuomo said. "This law will keep these unscrupulous agencies in check, end this unfair practice once and for all and help ensure New Yorkers receive more fair and accurate credit ratings."
Senator Brian P. Kavanagh said, "Americans increasingly live much of their lives online. Unfortunately, online activities through social media and other applications expose us to many risks, especially given the scant concern for privacy and equity that many companies have demonstrated when handling our personal data. Using social media networks to assess credit worthiness could lead to new forms of discrimination akin to redlining and other practices that have no legitimate place in our economy. I thank Assembly Member Crespo who has been a leader on this issue and passed this bill in the Assembly, and Governor Cuomo for signing it into law today—an important, proactive step to protect New Yorkers from unfair practices and ensure more accurate credit reporting."
Assembly Member Marcos A. Crespo said, "With so much of our financial stability and opportunities determined by our individual credit scores; it is crucial that fair and relevant data be used to determine such credit rating. A person's online use and search history is absolutely irrelevant to their credit worthiness. This law will protect New Yorkers from the growing threat of new credit formulas that consider online searches and posts in scoring credit. While so many New Yorkers struggle to make ends meet and/or make long term financial decisions such as the cost of college, purchasing a home or starting a new business— the fact is we must continue to take steps like this bill to ensure a level playing field for all. I thank Governor Cuomo for signing this critical legislation."
The US General Accounting Office has estimated that some 75 percent of credit scores are wrong based on incorrect information collected by credit bureaus and attached to individual credit scores. These errors and the fuzzy math used to create the credit score can impact the everyday lives of consumers when applying for jobs and schools or when finding housing.
The FICO score, a measure of consumer credit risk that has become a fixture of consumer lending in the United States, is now moving to add a consumer's social network as another variable in the more than 100 variable equation used to compute a consumer's credit score. This new law will prevent credit agencies from using this data to determine an individual's credit score, further protecting consumer right to privacy and preventing these agencies from assigning low-income consumers to lower credit scores based solely on their geography.
This law goes into effect immediately.
