Assembly OKs ban on credit report use

Erin Neff

Tuesday, March 18, 2003 | 9:08 a.m.

CARSON CITY -- Democrats won approval of three of their priority bills for early passage Monday, despite a partisan battle over whether insurance companies should be allowed to use credit reports to determine rates.

Assembly Bill 194 proved the most contentious of the measures, passing 26-16 with just three Republicans crossing the aisle to ban the practice of credit scoring.

AB194, which prohibits insurance companies from using credit reports to determine auto insurance rates, now goes to the Republican-controlled Senate.

Assembly Republicans, led by Ron Knecht, R-Carson City, argued that insurance rates would rise if insurance companies are prohibited from considering credit reports.

"As a result of this kind of legislation in Maryland, rates there rose 15.7 percent in 2002 while national rates, which were not affected by such a bill, increased only nine percent," Knecht said.

Assembly Democrats argued that the practice should be banned because a person's credit history does not dictate how they will drive.

"I have read volumes from both sides of the issue and feel that this practice steps over the line and becomes unfairly discriminatory," said Sheila Leslie, D-Reno.

Assemblywoman Genie Ohrenschall, D-Las Vegas, called credit scoring "a blatant form of socio-economic profiling."

Commerce and Labor Chairman David Goldwater, D-Las Vegas, told his colleagues that it was "a question of whether or not you want to look out for insurance companies or the people you represent."

Republicans, including Joe Hardy of Boulder City and Bob Beers of Las Vegas, argued that insurance companies need tools to determine rates and that those with good credit histories probably get a discount on auto insurance.

The only Republicans breaking with their caucus on the vote were John Carpenter of Elko, Chad Christensen of Las Vegas and Dawn Gibbons of Reno. Gibbons has supported the measure from the time it was first heard in committee.

Carpenter said he just does not believe credit reports should be used, while Christensen said he would prefer if insurance companies interview people instead of basing decisions on credit reports.

"The number of inquiries a person makes into their credit report impacts their auto rates," said Christensen, who has gone through a personal bankruptcy. "I really rode the line on this bill, but in the end I had to keep things sacred to their purpose."

The Assembly unanimously passed two other Democratic priority bills on Monday.

Assembly Bill 148, sponsored by Speaker Richard Perkins, D-Henderson, which requires a legislative audit of the university system, passed 42-0.

Assembly Bill 236, sponsored by Majority Leader Barbara Buckley, D-Las Vegas, establishes a prescription help desk within the Office of Consumer Health Assistance. It also passed 42-0.

The Assembly on Monday also amended three of the other Democratic priority bills, to line them up for passage Tuesday or Wednesday, the 45th day of the session and the date by which Democrats hoped to have all of their priorities approved.

The three bills establish a do-not-call registry, require an audit of the Clark and Washoe county school districts and establish penalties for school administrators who do not properly follow a state law regarding pupil discipline.

Also Monday, the Assembly unanimously approved Assembly Bill 252, Gov. Kenny Guinn's requested transfer of $100 million from the state's so-called rainy day fund to the general fund.