In 2007, the Nebraska Legislature adopted the “Credit Report Protection Act,” which is codified at Neb.Rev.Stat. § 8-2601 et.seq. and which became effective on September 1, 2007. The Act contains provisions allowing individuals to “freeze” their credit reports at each of the three major credit reporting agencies. While victims of identity theft and minors (any person under 19 years of age) may get a “freeze” placed on their credit report without cost, all other individuals are required to pay a $5 fee to each credit bureau for the placement or release of a freeze. Consumers are authorized to remove the freeze either on a permanent basis or simply “thaw” the freeze for a specific purpose.
Importantly for financial institutions, the law exempts the following from the restrictions on use of a credit report: (1) individuals or entities with whom the consumer has an account or contract, including a demand deposit account, or to whom the consumer issued a negotiable instrument, for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract or negotiable instrument. “Reviewing the account,” includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancement; and (2) subsidiaries of a person or entity to whom access has been granted for purposes of facilitating the extension of credit or other permissible use.
The law also exempts from the category of “consumer reporting” agencies: (1) a check service or fraud prevention services company that issues reports on incidents of fraud or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payments; and (2) a deposit account information service company that issues reports regarding account closures due to fraud, substantial overdrafts, automatic teller machine abuse, or similar negative information regarding a consumer, to inquiring banks or other financial institutions only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.