56 N.J.R. 1939(a)

VOLUME 56, ISSUE 19, OCTOBER 7, 2024
RULE PROPOSALS

Reporter
56 N.J.R. 1939(a)
NJ - New Jersey Register  >  2024  >  OCTOBER  >  OCTOBER 7, 2024  >  RULE PROPOSALS  >  LAW AND PUBLIC SAFETY -- DIVISION OF CONSUMER AFFAIRS

Interested Persons Statement 

INTERESTED PERSONS 
Interested persons may submit comments, information or arguments concerning any of the rule proposals in this issue until the date indicated in the proposal. Submissions and any inquiries about submissions should be addressed to the agency officer specified for a particular proposal. 
The required minimum period for comment concerning a proposal is 30 days. A proposing agency may extend the 30-day comment period to accommodate public hearings or to elicit greater public response to a proposed new rule or amendment. Most notices of proposal include a 60-day comment period, in order to qualify the notice for an exception to the rulemaking calendar requirements of  N.J.S.A. 52:14B-3. An extended comment deadline will be noted in the heading of a proposal or appear in a subsequent notice in the Register. 
At the close of the period for comments, the proposing agency may thereafter adopt a proposal, without change, or with changes not in violation of the rulemaking procedures at      N.J.A.C. 1:30-6.3. The adoption becomes effective upon publication in the Register of a notice of adoption, unless otherwise indicated in the adoption notice. Promulgation in the New Jersey Register establishes a new or amended rule as an official part of the New Jersey Administrative Code. 
Agency


LAW AND PUBLIC SAFETY > DIVISION OF CONSUMER AFFAIRS

Administrative Code Citation


Proposed New Rules: N.J.A.C. 13:45A-38      

Text

 Consumer Reporting Agencies Rules
Authorized By: New Jersey Division of Consumer Affairs, Cari Fais, Acting Director.
Authority: N.J.S.A. 56:11-34.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2024-121.
Submit written comments by December 6, 2024, to:
Cari Fais
Acting Director
New Jersey Division of Consumer Affairs
124 Halsey Street
PO Box 45027
Newark, NJ 07101
or electronically at: http://www.njconsumeraffairs.gov/Proposals/Pages/default.aspx
The agency proposal follows:
Summary
The Division of Consumer Affairs (Division) is proposing new rules to implement P.L. 2019, c. 183, which regulates disclosure requirements for consumer reporting agencies. The law requires reporting agencies that compile and maintain files on consumers on a nationwide basis to make certain information available upon a consumer's request in Spanish and certain other languages that are the first language of a significant number [page=1940] of consumers in the State, as determined by the Director of the Division (Director). The law also requires reporting agencies that compile and maintain files on consumers on a nationwide basis to provide notice, in any language determined by the Director, on their websites, of the availability of information subject to disclosure in languages other than English. The Division believes the proposed new rules are consistent with the Legislature's intent to help consumers with limited English proficiency review consumer reporting information and confirm that it is accurate.
On March 27, 2024, the U.S. District Court for the District of New Jersey partially invalidated and severed a provision in the statute, N.J.S.A. 56:11-34, which required that the disclosure be "made available in at least the 10 languages other than English and Spanish that are most frequently spoken as a first language by consumers in this State," finding that this provision infringed on reporting agencies' First Amendment rights. Consumer Data Industry Association v. Platkin, 2024 WL 1299256 (D.N.J. Mar. 27, 2024) (CDIA v. Platkin). The decision took issue specifically with the requirement that disclosures be made in "at least 10" other languages, and highlighted other State and Federal requirements that translations be made available in the seven most common non-English languages while identifying no Constitutional flaw in those requirements. Further, the decision does not affect the remainder of the statute and, thus, expressly permits the Division to promulgate rules to determine the languages other than English and Spanish in which the credit file disclosures must be provided.
Having considered the Federal district court's decision, as well as: (1) the translation requirements that New Jersey law imposes on State agencies; (2) the languages in which Federal agencies generally make significant documents available to the public; and (3) data from the U.S. Census Bureau's American Community Survey, the Division has concluded that it is appropriate to require consumer reporting agencies to make the consumer reporting information identified at P.L. 2019, c. 183, available to consumers in English, Spanish, and the next six most commonly spoken languages in the State.
First, New Jersey recently enacted P.L. 2023, c. 263, which requires State agencies to "translate vital documents and information, including public documents such as forms and instructions provided to or completed by program beneficiaries or participants ... in at least the seven most common non-English languages spoken by individuals with limited English proficiency in this State, based on United States Census Bureau American Community Survey data ..." N.J.S.A. 52:14-41a. Requiring consumer reporting agencies to make consumer reporting information available in English, Spanish, and the next six most commonly spoken languages in the State comports with the Legislature's judgment that "vital documents and information" should be available to the public in the seven most commonly spoken non-English languages in the State. P.L. 2023, c. 263, reflects a careful balancing of the burdens imposed on State agencies and the benefits of broad-based language access. Given the vital importance of consumer reporting information to consumers' ability to obtain credit on affordable terms, the Legislature's judgment is equally compelling in this context.
Second, the IRS now offers comprehensive tax information in seven non-English languages. See "IRS.gov offers tax help in a variety of languages," https://www.irs.gov/newsroom/irsgov-offers-tax-help-in-a-variety-of-languages. Indeed, the IRS even provides more limited tax information in 20 non-English languages. "Languages," https://www.irs.gov/help/languages. Similarly, the Consumer Financial Protection Bureau (CFPB) makes its entire website available in Spanish and seven additional non-English languages. See "Helping multilingual communities and newcomers," https://www.consumerfinance.gov/language/. The Federal Trade Commission (FTC), for its part, offers consumer education materials in Spanish and 11 additional languages. See  " Consumer Education in Multiple Languages," https://consumer.ftc.gov/features/languages. These approaches to language access support the Division's assessment that making important documents available to the public in seven non-English languages is essential to ensuring that non-native English speakers have equal access to public information.
Third, the U.S. Census Bureau's American Community Survey data (ACS data) supports the Division's conclusion. According to the most recent ACS data, the seven most commonly spoken non-English languages among New Jersey residents five years of age or older who speak English "less than very well" are: (1) Spanish (an estimated 678,270 residents); (2) Chinese (including both Mandarin and Cantonese) (an estimated 52,436 residents); (3) Portuguese (an estimated 47,309 residents); (4) Korean (an estimated 40,166 residents); (5) Gujarati (an estimated 28,729 residents); (6) Arabic (an estimated 24,732 residents); and (7) Haitian (an estimated 22,359 residents). See United States Census Bureau, American Community Survey, B16001, "Language Spoken at Home by Ability to Speak English for the Population 5 Years and Over," https://data.census.gov/table/ACSDT1Y2022.B16001?t=Language%20Spoken%20at%20Home&g=040XX00US34. In total, this amounts to 894,001 New Jersey residents, or approximately 10.22 percent of the total population of New Jersey age five or older (8,748,366 residents).
If history is any guide, these numbers are likely to rise in the years to come. In 2022, the Census Bureau estimated that 1,117,117 New Jersey residents five years of age or older, or 12.8 percent of the total population of New Jersey five years of age or older, spoke English "less than very well." See United States Census Bureau, American Community Survey, S1601, "Language Spoken at Home," https://data.census.gov/table/ACSST1Y2022.S1601?t=Language%20Spoken%20at%20Home&g=040XX00US34. In 2021, just one year earlier, those figures were 1,060,589 New Jersey residents and 12.1 percent, respectively. See United States Census Bureau, American Community Survey, S1601, "Language Spoken at Home," https://data.census.gov/table/ACSST1Y2021.S1601?t=Language%20Spoken%20at%20Home&g=040XX00US34. Thus, from 2021 to 2022, New Jersey saw an estimated increase of 56,528 residents age five or older who speak English "less than very well," and an increase of 0.7 in percentage terms. If the State experiences commensurate increases in the years to come, the need to ensure access to consumer reporting data for non-native English speakers will only become more urgent.
Access to consumer reporting information in their native languages is essential to protecting non-native English speakers from the abuses to which they are particularly vulnerable. To effectuate the Legislature's goal of ensuring transparency and fairness in consumer reporting, the Division believes it is necessary to require consumer reporting agencies to make consumer reporting information available in English, Spanish, and the next six most commonly spoken languages in New Jersey.
To that end, the Division is proposing new N.J.A.C. 13:45A-38 to effectuate the provisions at P.L. 2019, c. 183. N.J.A.C. 13:45A-38.1 sets forth that Subchapter 38 implements P.L. 2019, c. 183, which applies to consumer reporting agencies. N.J.A.C. 13:45A-38.2 provides definitions for the terms used in Subchapter 38, incorporating relevant statutory definitions from N.J.S.A. 56:11-30.
N.J.A.C. 13:45A-38.3 sets forth the type of information and manner by which a consumer reporting agency must disclose such information to a consumer. N.J.A.C. 13:45A-38.3(a) requires a consumer reporting agency to disclose certain information to a consumer upon a consumer's request and proper identification. One of the provisions in this section requires a consumer reporting agency to disclose the sources of the information it has in a consumer's file, except a source need not be disclosed if it provided information used solely in preparing an investigative consumer report. N.J.A.C. 13:45A-38.3(b) states that this exception will not apply if an action has been brought pursuant to the New Jersey Fair Credit Reporting Act or the Federal Fair Credit Reporting Act. Subsection (c) requires a consumer reporting agency to disclose the identity of each person who procured a consumer report. N.J.A.C. 13:45A-38.3(d) sets forth the information that has to be included in this disclosure.
N.J.A.C. 13:45A-38.4 requires a reporting agency that compiles and maintains files on consumers on a nationwide basis to make the information subject to disclosure available to a consumer, upon request, in English, Spanish, or one of six languages determined by the Director to be the first language of a significant number of consumers in New Jersey. The Director's determination on languages will be based on the U.S. Census Bureau's American Community Survey, or a comparable data set, and specifically on the number of people who report speaking English at a proficiency below "very well." A list of the languages identified by the Director pursuant to this provision will be posted on the Division's website. Reporting agencies will be required to check the list once per [page=1941] calendar year and make consumer reports available in languages included in the updated list by June 30 of the following year.
N.J.A.C. 13:45A-38.4(e) requires a reporting agency that compiles and maintains files on consumers on a nationwide basis to provide notice, in Spanish and the six languages identified by the Director, on its website of the availability of information subject to disclosure in languages other than English. A reporting agency will be required to check the list once per calendar year and provide notice in languages included in the updated list by June 30 of the following year.
The Division has determined that the comment period for this notice of proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.
Social Impact
The proposed new rules are anticipated to have a positive social impact on consumers by increasing access to and understanding of consumer reporting information for consumers with limited English proficiency. The Division also believes that the proposed new rules will have a positive effect on members of the regulated community by clarifying their obligations and responsibilities pursuant to State law.
Economic Impact
The proposed new rules will have an economic impact on all reporting agencies that compile and maintain files on consumers on a nationwide basis that conduct business in New Jersey. Reporting agencies will have to make consumer reporting information available upon request and provide Internet website notices in Spanish and six other languages determined by the Director. The proposed new rules may require reporting agencies to engage professional translation services or purchase software to ensure they comply with the proposed new rules. The costs associated with engaging professional translation services and for the production of disclosures and notice in languages other than English will vary depending on the volume of consumer requests for information in languages other than English that reporting agencies receive and the frequency of changes to the list of languages established pursuant to the proposed new rules.
The Division anticipates that the proposed new rules may have a positive financial impact on some consumers who might previously have had difficulty understanding consumer reporting information provided in English, or who might previously have required the assistance of a translator to understand such information. These consumers will have greater access to such information and will be better equipped to rectify inaccurate information in consumer reports.
Federal Standards Statement
N.J.S.A. 52:14B-1 et seq. (P.L. 1995, c. 65), requires State agencies that adopt, readopt, or amend State rules that exceed any Federal standards or requirements to include in the rulemaking a comparison with Federal law.
The Division's authority for regulating consumer reporting agency consumer disclosures derives from State law, specifically N.J.S.A. 56:11-34. N.J.S.A. 56:11-34 incorporates parts of 15 U.S.C. § 1681g(a) concerning disclosures to consumers. The Division is aware that some reporting agencies contend that N.J.S.A. 56:11-34's disclosure requirement is inconsistent with 15 U.S.C. § 1681t(b), which provides for limited Federal preemption of certain state regulations. However, for all the reasons argued by the New Jersey Attorney General and the reasons found by the Federal district court in CDIA v. Platkin, the Division believes that the disclosure requirements imposed upon reporting agencies pursuant to N.J.S.A. 56:11-34, and the implementation of those requirements in the proposed new rules, are consistent with, and not preempted by, Federal law. In particular, the information required to be translated by the proposed new rules is the same as that required by the Federal disclosure, and Federal law does not impose any requirements with respect to the language of a file disclosure. In short, although Federal law does not affirmatively require reporting agencies to provide such translations, nor does it preclude a state from imposing such a requirement pursuant to its own state laws. Furthermore, the proposed new rules implement the Legislature's clear intent to provide access to consumer reporting information to consumers with limited English proficiency.
The proposed new rules, at N.J.A.C. 13:45A-38.4(e), which also implement N.J.S.A. 56:11-34, require consumer reporting agencies that compile and maintain files on consumers on a nationwide basis to provide notice on their websites in English, Spanish, and at least six other languages determined by the Director, regarding the availability of information subject to disclosure in languages other than English. Although Federal law does not require consumer reporting agencies to provide this notice, to the extent the proposed new rules exceed Federal requirements, they do not conflict with those standards, and they implement the Legislature's clear intent to provide notice to consumers with limited English proficiency of the availability of consumer reporting information in languages other than English. To the extent that costs are incurred by consumer reporting agencies in complying with the proposed new rules, the Division believes that these costs are justified to promote the financial welfare of consumers with limited English proficiency in the State.
Jobs Impact
The Division does not anticipate that the proposed new rules will result in the creation or loss of jobs in the State.
Agriculture Industry Impact
The Division does not anticipate that the proposed new rules will have any impact on the agriculture industry in the State.
Regulatory Flexibility Analysis
Any consumer reporting agency that qualifies as a "business which is resident in this State, independently owned and operated and not dominant in its field, and which employs fewer than 100 full-time employees," would constitute a "small business" within the meaning of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. (RFA). To the extent a consumer reporting agency qualifies as a "small business" pursuant to the RFA, the following analysis applies pursuant to N.J.S.A. 52:14B-19.
It is difficult to identify the number of consumer reporting agencies that would be subject to the proposed new rules as such agencies are not licensed or registered by the Division. The proposed new rules do not impose any recordkeeping or reporting requirements, but do impose compliance requirements as detailed in the Summary above. The costs associated with the proposed new rules are discussed in the Economic Impact. The proposed new rules may require reporting agencies to engage the professional services of translators or purchase software to ensure they comply with the proposed new rules. The costs associated with engaging the professional services of translators and purchasing software to produce disclosures and notices in languages other than English will vary depending on the number of requests for information in languages other than English, that reporting agencies receive and the frequency of changes to the list of languages identified by the Director.
The Division believes that the new rules are necessary to promote and protect the public welfare; therefore, the Division believes that the new rules must be uniformly applied to all consumer reporting agencies that are subject to N.J.S.A. 56:11-34's translation requirement and no exemptions are provided based on size of the business.
Housing Affordability Impact Analysis
The proposed new rules will have an insignificant impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the proposed new rules would evoke a change in the average costs associated with housing because the proposed new rules concern the languages in which reporting agencies must provide certain information and notices to consumers.
Smart Growth Development Impact Analysis
The proposed new rules will have an insignificant impact on smart growth and there is an extreme unlikelihood that the rulemaking would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers pursuant to the State Development and Redevelopment Plan in New Jersey because the proposed new rules concern the languages in which reporting agencies must provide certain information and notices to consumers.
[page=1942] 
Racial and Ethnic Community Criminal Justice and Public Safety Impact
The Division has evaluated this rulemaking and determined that it will not have an impact on pretrial detention, sentencing, probation, or parole policies concerning juveniles and adults in the State. Accordingly, no further analysis is required.
Full text of the proposed new rules follows:
SUBCHAPTER 38. CONSUMER REPORTING AGENCIES
13:45A-38.1 Purpose and scope
The purpose of this subchapter is to implement the provisions at P.L. 2019, c. 183, which regulates consumer reporting agencies.
13:45A-38.2 Definitions
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Consumer" means an individual.
"Consumer report" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living that is used, or expected to be used, or collected, in whole or in part, for the purpose of serving as a factor in establishing the consumer's eligibility for:
1. Credit or insurance to be used primarily for personal, family, or household purposes;
2. Employment purposes; or
3. Any other purpose authorized pursuant to N.J.S.A. 56:11-28 et seq.
"Consumer report" does not include:
1. A report containing information solely on transactions or experiences between the consumer and the person making the report;
2. Any communication of that information among persons related by common ownership or affiliated by corporate control;
3. Any communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspicuously disclosed to the consumer that the information may be communicated among those persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that the information not be communicated among those persons;
4. Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;
5. Any report in which a person, who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer, conveys their decision with respect to that request, if the third party advises the consumer of the name and address of the person to whom the request was made, and the person makes the disclosures to the consumer required pursuant to 15 U.S.C. § 1681m; or
6. Any communication excluded from the definition of consumer report pursuant to subsection (o) of section 603 of the Federal Fair Credit Reporting Act, 15 U.S.C. § 1681a.
"Consumer reporting agency" means any agency that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility for the purpose of preparing or furnishing consumer reports.
"Director" means the Director of the Division of Consumer Affairs.
"Division" means the Division of Consumer Affairs.
"Employment purposes" means, when used in connection with a consumer report, a report used for the purpose of evaluating a consumer for employment, promotion, reassignment, or retention as an employee.
"File" means, when used in connection with information on any consumer, all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored.
"Investigative consumer report" means a consumer report, or a portion thereof, in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer who is the subject of the report, or with others with whom the consumer is acquainted or who may have knowledge concerning any of those items of information. However, this information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when the information was obtained directly from a creditor of the consumer or from the consumer.
"Reporting agency that compiles and maintains files on consumers on a nationwide basis" means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide:
1. Public record information; and
2. Credit account information from persons who furnish that information regularly and in the ordinary course of business.
13:45A-38.3 Disclosure to consumer
(a) Every consumer reporting agency shall, upon request and proper identification of any consumer, clearly and accurately disclose to the consumer, all information in the consumer's file at the time of the request.
(b) The sources of the information at (a) above; except that the sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed; provided, that if an action is brought pursuant to this chapter or the Federal Fair Credit Reporting Act, such sources shall be available to the plaintiff through appropriate discovery procedures in the court in which the action is brought.
(c) The identification of each person, including each end-user identified pursuant to subsections d and e of section 5 at P.L. 1997, c. 172, who procured a consumer report:
1. For employment purposes, during the two-year period preceding the date on which the request is made; or
2. For any other purpose, during the one-year period preceding the date on which the request is made.
(d) An identification of a person at (c) above shall include:
1. The name of the person, or, if applicable, the trade name written in full under which the person conducts business; and
2. Upon request of the consumer, the address and telephone number of the person.
(e) The dates, original payees, and amounts of any checks upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.
(f) A record of all inquiries received by the agency during the one-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.
13:45A-38.4 Languages for reports
(a) A reporting agency that compiles and maintains files on consumers on a nationwide basis shall make the information subject to disclosure pursuant to N.J.S.A. 56:11-34 available to a consumer, upon the consumer's request, in:
1. English;
2. Spanish; or
3. Any of the six languages that are determined by the Director of the Division of Consumer Affairs to be the first language of a significant number of consumers in the State.
(b) The Director's determination of the six additional languages, other than English and Spanish, that are the first language of a significant number of persons in the State shall be based on the U.S. Census Bureau's American Community Survey or a comparable data set. This determination shall be based on the number of American Community Survey respondents who indicated that they speak English at a level of proficiency below "very well," or on similar data from a data set that is comparable to the U.S. Census Bureau's American Community Survey.
(c) A list of languages identified pursuant to (b) above shall be posted on the Division's website at https://www.njconsumeraffairs.gov/.
(d) A reporting agency that compiles and maintains files on consumers on a nationwide basis shall check the list referenced at (c) above at least [page=1943] once per calendar year and shall be required to make consumer reports available in languages included in the updated list by June 30 of the following year.
(e) A reporting agency that compiles and maintains files on consumers on a nationwide basis shall provide notice, in Spanish and any language identified pursuant to (b) above, on its Internet website in a clear and conspicuous location, of the availability of information subject to disclosure pursuant to this section in languages other than English.
(f) A reporting agency that compiles and maintains files on consumers on a nationwide basis shall check the list referenced at (c) above at least once per calendar year and shall update the notices required at (e) above to include any languages that have been added to that list by June 30 of the following year.