WHAT THIS BILL REGULATES · 7 REQUIREMENT TYPES
How Is This Bill Enforced
Verbatim statutory text on the left; plain-language analysis and a per-section checklist on the right. Numbered markers cross-link to the matching checklist row.
(a) In this subtitle the following words have the meanings indicated.
(c) "CommissionerCommissioner"Commissioner" means the Commissioner of Financial Regulation of the Maryland Department of Labor.Md. Code, Com. Law § 14–1201(c)" means the Commissioner of Financial Regulation of the Maryland Department of Labor.
(d) "ConsumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d)" means an individual.
(e) "Consumer reportConsumer report"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 which 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: (i) Credit or insurance to be used primarily for personal, family, or household purposes; (ii) Employment purposes; or (iii) Other purposes authorized under § 14–1202 of this subtitle. (2) The term does not include: (i) Any report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; or (iii) 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 his decision with respect to the 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 under § 14–1212 of this subtitle.Md. Code, Com. Law § 14–1201(e)" means any written, oral, or other communication of any information by a consumer reporting agencyConsumer reporting agency"Consumer reporting agency" means any person which, 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 of commerce for the purpose of preparing or furnishing consumer reports. (2) "Consumer reporting agency" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumer credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumer based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.Md. Code, Com. Law § 14–1201(f) bearing on a consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d)'s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which 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 consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d)'s eligibility for: (i) Credit or insurance to be used primarily for personal, family, or household purposes; (ii) Employment purposes; or (iii) Other purposes authorized under § 14–1202 of this subtitle. (2) The term does not include: (i) Any report containing information solely as to transactions or experiences between the consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) and the person making the report; (ii) Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; or (iii) 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 consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) conveys his decision with respect to the 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 consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) required under § 14–1212 of this subtitle.
(f) "Consumer reporting agencyConsumer reporting agency"Consumer reporting agency" means any person which, 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 of commerce for the purpose of preparing or furnishing consumer reports. (2) "Consumer reporting agency" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumer credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumer based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.Md. Code, Com. Law § 14–1201(f)" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) credit information or other information on consumersConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) for the purpose of furnishing consumer reportsConsumer report"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 which 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: (i) Credit or insurance to be used primarily for personal, family, or household purposes; (ii) Employment purposes; or (iii) Other purposes authorized under § 14–1202 of this subtitle. (2) The term does not include: (i) Any report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; or (iii) 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 his decision with respect to the 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 under § 14–1212 of this subtitle.Md. Code, Com. Law § 14–1201(e) to third parties, and which uses any means or facility of commerce for the purpose of preparing or furnishing consumer reportsConsumer report"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 which 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: (i) Credit or insurance to be used primarily for personal, family, or household purposes; (ii) Employment purposes; or (iii) Other purposes authorized under § 14–1202 of this subtitle. (2) The term does not include: (i) Any report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; or (iii) 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 his decision with respect to the 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 under § 14–1212 of this subtitle.Md. Code, Com. Law § 14–1201(e). (2) "Consumer reporting agencyConsumer reporting agency"Consumer reporting agency" means any person which, 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 of commerce for the purpose of preparing or furnishing consumer reports. (2) "Consumer reporting agency" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumer credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumer based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.Md. Code, Com. Law § 14–1201(f)" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumerConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.
This section reenacts without amendment the existing definitions used throughout Subtitle 12 of the Maryland Commercial Law Article (the Maryland Consumer Credit Reporting Act). The key defined terms — Commissioner, Consumer, Consumer report, and Consumer reporting agency — establish the scope of new § 14–1228. The bill does not introduce any new defined terms; all obligations in the new section apply to entities already meeting the existing definition of consumer reporting agency.
(A) THIS SECTION APPLIES ONLY TO A CONSUMER REPORTING AGENCYConsumer reporting agency"Consumer reporting agency" means any person which, 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 of commerce for the purpose of preparing or furnishing consumer reports. (2) "Consumer reporting agency" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumer credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumer based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.Md. Code, Com. Law § 14–1201(f) THAT USES ALGORITHMIC SYSTEMS TO ASSEMBLE OR EVALUATE CONSUMERConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) CREDIT INFORMATION OR OTHER INFORMATION ON CONSUMERSConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) FOR THE PURPOSE OF FURNISHING CONSUMER REPORTSConsumer report"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 which 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: (i) Credit or insurance to be used primarily for personal, family, or household purposes; (ii) Employment purposes; or (iii) Other purposes authorized under § 14–1202 of this subtitle. (2) The term does not include: (i) Any report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; or (iii) 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 his decision with respect to the 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 under § 14–1212 of this subtitle.Md. Code, Com. Law § 14–1201(e) TO THIRD PARTIES.
(B)(1) 1 A CONSUMER REPORTING AGENCYConsumer reporting agency"Consumer reporting agency" means any person which, 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 of commerce for the purpose of preparing or furnishing consumer reports. (2) "Consumer reporting agency" does not include: (i) A person licensed as a private detective agency or certified as a private detective under the Maryland Private Detectives Act; or (ii) A person who assembles and exchanges consumer credit information with an affiliated person or a person who is owned or controlled by the same entity, provided that, in the event of an adverse credit decision against a consumer based on that information, the entity making the decision shall comply with the notice requirements of § 14–1212(b) of this subtitle.Md. Code, Com. Law § 14–1201(f) SUBJECT TO THIS SECTION SHALL: (1) BE ABLE TO PROVIDE AN EXPLANATION OF EACH EVALUATION MADE BY AN ALGORITHMIC SYSTEM IN PLAIN LANGUAGE THAT MEETS, AT A MINIMUM, AN 8.0 ON THE FLESCH–KINCAID READABILITY TESTS;
(B)(2) 2 MAINTAIN A PUBLIC REGISTRY OF ALL ALGORITHMS USED INCLUDING THEIR PURPOSE, DATA SOURCES, AND GENERAL METHODOLOGY;
(B)(3) 3 MAINTAIN: (I) AN OVERALL ERROR RATE FOR ALGORITHMIC EVALUATIONS OF LESS THAN 0.5% WHEN COMPARED TO HUMAN REVIEW; (II) DISCRIMINATORY DATA RATES BASED ON PROTECTED CHARACTERISTICS OF LESS THAN 0.1%; AND (III) ACCURACY OF DATA INPUTS AT A RATE OF AT LEAST 99.9%;
(B)(4) 4 PROCURE QUARTERLY HARMFUL BIAS AUDITS BY AN INDEPENDENT THIRD–PARTY ORGANIZATION THAT INCLUDE ERROR RATES AND HARMFUL BIAS ASSESSMENTS AND SUBMIT TO THE COMMISSIONERCommissioner"Commissioner" means the Commissioner of Financial Regulation of the Maryland Department of Labor.Md. Code, Com. Law § 14–1201(c): (I) EACH QUARTERLY AUDIT WITHIN 30 DAYS AFTER COMPLETION; AND (II) ANNUAL REPORTS SUMMARIZING THE QUARTERLY AUDIT RESULTS AND ALGORITHMIC PERFORMANCE;
(B)(5) 5 IMPLEMENT A DATA GOVERNANCE FRAMEWORK THAT: (I) CERTIFIES DATA SOURCES FOR ACCURACY AND RELEVANCE WITH UPDATES AT LEAST MONTHLY; (II) TRACKS DATA LINEAGE AND ESTABLISHES QUALITY CONTROL MEASURES; AND (III) INCLUDES MINIMUM DATA SET SIZE REQUIREMENTS TO ENSURE STATISTICAL SIGNIFICANCE IN ALGORITHMIC EVALUATIONS, INCLUDING: 1. FOR SIMPLE ALGORITHMS WITH FEW VARIABLES, AT LEAST 1,000 DATA POINTS PER CATEGORY OR SUBGROUP ANALYZED; 2. FOR MORE COMPLEX ALGORITHMS OR THOSE INVOLVING MULTIPLE VARIABLES, AT LEAST 5,000 DATA POINTS PER CATEGORY OR SUBGROUP ANALYZED; AND 3. FOR HIGHLY COMPLEX MODELS OR WHEN DETECTING SMALL EFFECTS, AT LEAST 10,000 DATA POINTS PER CATEGORY OR SUBGROUP ANALYZED;
(B)(6) 6 REQUIRE ALL AUTOMATED EVALUATIONS TO: (I) BE SUBJECT TO HUMAN REVIEW WITHIN 24 HOURS AFTER THE EVALUATION; AND (II) ALLOW FOR AN EXPEDITED REVIEW PROCESS INCLUDING HUMAN REVIEW WITHIN 48 HOURS AFTER THE REVIEW REQUEST BEING SUBMITTED;
(B)(7) 7 REQUIRE AT LEAST 10% OF ALL ALGORITHMIC EVALUATIONS TO UNDERGO RANDOM HUMAN REVIEW TO PREVENT FALSE POSITIVES;
(B)(8) 8 DESIGNATE STAFF TO BE RESPONSIBLE FOR COMPLIANCE WITH THIS SECTION;
(B)(9) 9 IMPLEMENT A SYSTEM TO IMPROVE ALGORITHMIC PERFORMANCE BASED ON REVIEW OUTCOMES AND HUMAN EXPERT INPUT;
(B)(10) 10 PROVIDE ALTERNATIVE, NONALGORITHMIC ASSESSMENT OPTIONS FOR CONSUMERSConsumer"Consumer" means an individual.Md. Code, Com. Law § 14–1201(d) WHO OPT OUT OF AUTOMATED DECISION MAKING; AND
(B)(11) 11 MAINTAIN A CONTINGENCY PLAN FOR SYSTEM FAILURES OR DATA BREACHES THAT COULD COMPROMISE ALGORITHMIC INTEGRITY.
(C)(1)–(2) 12 THE COMMISSIONERCommissioner"Commissioner" means the Commissioner of Financial Regulation of the Maryland Department of Labor.Md. Code, Com. Law § 14–1201(c) SHALL: (1) ESTABLISH ANNUAL ASSESSMENT THRESHOLDS FOR ALGORITHMS TO ENSURE THEY REMAIN APPROPRIATE AS TECHNOLOGY EVOLVES; (2) MANDATE REGULAR TRAINING FOR HUMAN REVIEWERS ON ALGORITHM FUNCTIONALITY AND POTENTIAL HARMFUL BIAS; AND
(C)(3) 13 IMPLEMENT A WHISTLEBLOWER PROTECTION PROGRAM FOR EMPLOYEES WHO REPORT ALGORITHMIC MISUSE OR NONCOMPLIANCE.
(D) THE COMMISSIONERCommissioner"Commissioner" means the Commissioner of Financial Regulation of the Maryland Department of Labor.Md. Code, Com. Law § 14–1201(c) MAY ADOPT REGULATIONS TO CARRY OUT THE PROVISIONS OF THIS SECTION.
This is the bill's sole operative section, imposing a comprehensive set of algorithmic governance obligations on consumer reporting agencies that use algorithmic systems. Subsection (A) limits scope to agencies that use algorithmic systems to assemble or evaluate consumer credit information for furnishing consumer reports. Subsection (B) then imposes eleven distinct categories of obligation on covered agencies, ranging from explainability and public registry requirements to hard-coded quantitative performance thresholds, independent bias audits, data governance frameworks with tiered minimum dataset sizes, mandatory human review of all automated evaluations, a consumer opt-out right, and contingency planning.
Subsection (C) assigns the Commissioner of Financial Regulation three continuing regulatory duties: establishing evolving annual assessment thresholds, mandating human reviewer training, and implementing a whistleblower protection program for employees who report algorithmic misuse. Subsection (D) grants the Commissioner general rulemaking authority.
The quantitative thresholds in (B)(3) — 0.5% maximum error rate, 0.1% discriminatory data rate, and 99.9% data input accuracy — and the tiered minimum dataset sizes in (B)(5)(III) are notably prescriptive and hard-coded in statute rather than delegated to rulemaking. The mandatory 24-hour human review of all automated evaluations in (B)(6) is also unusually aggressive for a consumer reporting context involving high volumes of automated processing.