15 U.S. Code § 1681g - Disclosures to consumers

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Consumer Compliance Outlook

Specific issues and questions about consumer compliance matters should be raised with your primary regulator. E the name of the person or entity that provided the credit score or credit file upon which the credit score was created. A lender shall not have liability under any contractual provision for disclosure of a credit score pursuant to this subsection. B nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer. If you get two or more credit scores and use only one of them in your determination, like the low, middle, high, or most recent score, your notice must include the score you used and the information below.

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U.S. Code Toolbox

FCRA Notice to Home Loan Applicant - Credit Score Discl. Paul Hallquist of Beacon Bank in Shorewood, MN, has created a Notice to Home Loan Applicant and Credit Score Disclosure form, plus a separate instruction sheet so that users can easily understand it. “notice to the home loan applicant “In connection with your application for a home loan, the lender must disclose to you the score that a consumer reporting agency distributed to users and the lender used in connection with your home loan, and the key factors affecting your credit scores. Fair Credit Reporting Act1 The Fair Credit Reporting Act (FCRA)2 became effective on April 25, The FCRA is a part an existing credit arrangement where the applicant is delinquent or otherwise in default, or where a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of.

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Consumer Compliance Outlook: Third Quarter 2011

Section a w of this title , referred to in subsec. Public Law — , referred to in subsec. Prior to amendment, subsec. Prior to amendment, par. Section effective upon the expiration of one hundred and eighty days following Oct. This is a list of parts within the Code of Federal Regulations for which this US Code section provides rulemaking authority. It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly.

More limitations on accuracy are described at the GPO site. Cornell Law School Search Cornell. B nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer.

Provided , That in the event an action is brought under this subchapter, such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought. B An identification of a person under subparagraph A shall include— i the name of the person or, if applicable, the trade name written in full under which such person conducts business; and.

B Content of summary The summary of rights prepared under subparagraph A shall include a description of— i the right of a consumer to obtain a copy of a consumer report under subsection a from each consumer reporting agency;. B in the case of a consumer reporting agency described in section a p of this title , a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours;.

C a list of all Federal agencies responsible for enforcing any provision of this subchapter, and the address and any appropriate phone number of each such agency , in a form that will assist the consumer in selecting the appropriate agency;. D a statement that the consumer may have additional rights under State law, and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general or the equivalent thereof to learn of those rights; and.

E a statement that a consumer reporting agency is not required to remove accurate derogatory information from the file of a consumer , unless the information is outdated under section c of this title or cannot be verified.

B any Federal, State , or local government law enforcement agency or officer specified by the victim in such a request; or. C any law enforcement agency investigating the identity theft and authorized by the victim to take receipt of records provided under this subsection.

B as proof of a claim of identity theft , at the election of the business entity— i a copy of a police report evidencing the claim of the victim of identity theft ; and. B be mailed to an address specified by the business entity, if any; and. C if asked by the business entity, include relevant information about any transaction alleged to be a result of identity theft to facilitate compliance with this section including— i if known by the victim or if readily obtainable by the victim , the date of the application or transaction; and.

B after reviewing the information provided pursuant to paragraph 2 , the business entity does not have a high degree of confidence in knowing the true identity of the individual requesting the information;.

C the request for the information is based on a misrepresentation of fact by the individual requesting the information relevant to the request for information; or. B Limitation Except as provided in subparagraph A , nothing in this subsection permits a business entity to disclose information, including information to law enforcement under subparagraphs B and C of paragraph 1 , that the business entity is otherwise prohibited from disclosing under any other applicable provision of Federal or State law.

B the records requested under this subsection do not exist or are not reasonably available. B the range of possible credit scores under the model used;. C all of the key factors that adversely affected the credit score of the consumer in the model used, the total number of which shall not exceed 4, subject to paragraph 9 ;.

D the date on which the credit score was created; and. E the name of the person or entity that provided the credit score or credit file upon which the credit score was created.

II any other elements of the underwriting process or underwriting decision. B develop scores that assist credit providers in understanding the general credit behavior of a consumer and predicting the future credit behavior of the consumer.

B Exception This paragraph shall not apply to a consumer reporting agency that develops or modifies scores that are developed by another person or entity. B a statement indicating that the information and credit scoring model may be different than that used by the lender.

A Information required under subsection f i In general A copy of the information identified in subsection f that was obtained from a consumer reporting agency or was developed and used by the user of the information.

B Disclosures in case of automated underwriting system i In general If a person that is subject to this subsection uses an automated underwriting system to underwrite a loan, that person may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer reporting agency. C Disclosures of credit scores not obtained from a consumer reporting agency A person that is subject to the provisions of this subsection and that uses a credit score, other than a credit score provided by a consumer reporting agency, may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer reporting agency.

D Notice to home loan applicants A copy of the following notice, which shall include the name, address, and telephone number of each consumer reporting agency providing a credit score that was used: E Actions not required under this subsection This subsection shall not require any person to— i explain the information provided pursuant to subsection f ;.

Model forms are available for each type of notice. The substance of the rules is identical. You must notify consumers when you have used information in their credit report to offer them credit on materially less-favorable terms than the best material terms available to most consumers.

When there is no APR, the material term is the one that has the most significant financial impact on the consumer and varies based on information in a consumer report. You are not required to send a risk-based pricing notice if a person applies for credit under specific terms and is granted credit on those terms. For example, if someone gets an application for credit offered at a 12 percent interest rate, and applies for — and is granted — the credit, no notice is required even if you give some consumers a 10 percent interest rate.

But if the application states that credit will be granted at a rate between 8 percent and 12 percent, a risk-based pricing notice would be required for the consumers who are granted more expensive credit. You can determine this by directly comparing the material terms offered to each consumer with the material terms offered to others for a specific type of credit product.

Special rules are available for credit card issuers. For transactions involving multiple consumers — say, a joint mortgage or co-signers for a loan — determining whether each consumer needs to be notified separately depends on several factors:. Separate notices are required under the circumstances described above whether you are using a regular risk-based pricing notice or the credit score disclosure exception.

A risk-based pricing notice must be clear and conspicuous. It can be oral, written, or electronic. Model forms are available; if you use them, you will have complied with the requirements regarding the contents of the notice.

If you use credit scores, special requirements apply. If you get and use one credit score in your determination, you must include the information below. If you get two or more credit scores and use only one in your determination — for example, the low, middle, high, or most recent score — you must include the score used and the information below in your notice.

If you get and use two or more credit scores — for example, if you average the scores — you must include at least one of the scores and the information below. You may include more than one of the scores you used, but you must include the information below for each score.

For a risk-based pricing notice following an account review, include all the relevant terms above except the statement that the terms offered may be less favorable than those offered to people with better credit histories, as well as statements that:. You can satisfy the requirements of the Risk-Based Pricing Rule by giving a credit score notice to every consumer, regardless of the terms on which you granted them credit. If you get two or more credit scores and use only one of them in your determination, like the low, middle, high, or most recent score, your notice must include the score you used and the information below.

If you get and use two or more credit scores — say you average the scores — your notice must include at least one of the scores and the information below. Special rules apply for mortgages and other extensions of credit secured by one to four units of residential real property. If you choose this alternative, the credit score disclosure exception notice must tell the consumer:.

In general, you must provide a risk-based pricing notice if you use a consumer report in connection with an application for — or grant of credit for — personal, family, or household purposes to someone on less favorable terms than you grant to others.

For example, if an initial creditor extends credit to a consumer and then immediately sells the credit contract, the initial creditor must give the notice, not the creditor who bought the contract. The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Small businesses can comment to the Ombudsman without fear of reprisal. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair practices in the marketplace and to provide information to businesses to help them comply with the law.

To file a complaint, visit ftc.

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