their final rules implementing the new credit score disclosure
requirements under Dodd-Frank, specifically relating to adverse actions
and risk-based pricing notices under FCRA/Regulation V and ECOA/Regulation
B.
Model forms are also provided.
Copies of the Final Rules are available at:
Regulation V:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a1.pdf
Regulation B:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a2.pdf
Under section 311 of FACTA, if a credit score is used in setting material
terms of credit or in taking adverse action, creditors must disclose
credit scores and related information to consumers in notices. Section
1100F of the Dodd-Frank Act changed the content required for risk-based
pricing notices. Accordingly, the final rules amend Regulation V to
revise the content requirements for risk-based pricing notices, and to add
related model forms that reflect the new credit score disclosure
requirements.
The final rules also amend certain model notices in Regulation B, which
combine the adverse action notice requirements for Regulation B and the
FCRA, to reflect the new credit score disclosure requirements
The rules under Regulations V and B are effective 30 days after the date
of publication in the Federal Register, which is expected shortly.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: RWutscher@mtwllp.com
NOTICE: We do not send unsolicited emails. If you received this email in
error, or if you wish to be removed from our update distribution list,
please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at:
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________________________________
Subject: FYI: FRB/FTC Issue Proposed Rule on Dodd-Frank Act Changes
to Risk-Based Pricing, Adverse Action Notices
Date: Wed, 2 Mar 2011 10:03:19 -0600
From: RWutscher@mtwllp.com
To: Ralph Wutscher <rwutscher@mtwllp.com>
CC: socaloffice@mtwllp.com, dcoffice@mtwllp.com,
chicagooffice@mtwllp.com
The Federal Reserve Board and Federal Trade Commission propose to: (1)
revise and add to the content requirements for risk-based pricing notices;
and (2) revise and add related risk-based pricing and adverse action
notice model forms to reflect the new Dodd-Frank Act credit score
disclosure requirements .
The full text of the proposed risk-based pricing rule is available at:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110301a1.pdf
The full text of the proposed adverse action notice rule is available at:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110301a2.pdf
In January of last year, the FRB and the FTC published final rules to
implement the risk-based pricing provisions in section 311 of the Fair and
Accurate Credit Transactions Act of 2003 (FACT Act), which amends the Fair
Credit Reporting Act (FCRA).
These existing final rules generally require a creditor to provide a
risk-based pricing notice to a consumer when the creditor uses a consumer
report to grant or extend credit to the consumer on material terms that
are materially less favorable than the most favorable terms available to a
substantial proportion of consumers from or through that creditor. The
mandatory compliance date for these existing risk-based pricing rules was
January 1, 2011.
As you may recall, the Dodd-Frank Act requires creditors to also and
additionally disclose credit scores and related information to consumers
in risk-based pricing and adverse action notices under the Fair Credit
Reporting Act, if a credit score was used in setting the credit terms or
taking adverse action. The effective date of these amendments is July
21, 2011.
Section 1100F of the Dodd-Frank Act requires that a risk-based pricing
notice include: (1) a numerical credit score used in making the credit
decision; (2) the range of possible scores under the model used; (3) the
key factors that adversely affected the credit score of the consumer in
the model used; (4) the date on which the credit score was created; and
(5) the name of the person or entity that provided the credit score.
Accordingly, in order to prepare for the effective date of the Dodd-Frank
Act amendments, the FRB and FTC propose to amend their respective
risk-based pricing rules to require disclosure of credit scores and
information relating to credit scores in risk-based pricing notices, if a
credit score of the consumer is used in setting the material terms of
credit.
In addition, the Federal Reserve Board proposes to amend the adverse
action model notices under Regulation B (Equal Credit Opportunity Act),
which combine the adverse action notice requirements for both Regulation B
and the FCRA. The proposed amendments would revise the model notices to
incorporate the new credit score disclosure requirements.
The Board proposes to amend these model notices in Regulation B to include
the disclosure of credit scores and information relating to credit scores
if a credit score is used in taking adverse action. These proposed
amendments reflect the new content requirements in section 615(a) of the
FCRA that were added by section 1100F of the Dodd-Frank Wall Street Reform
and Consumer Protection Act.
Public comments on the proposed rules are due 30 days after publication in
the Federal Register, which is expected shortly.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: RWutscher@mtwllp.com
NOTICE: We do not send unsolicited emails. If you received this email in
error, or if you wish to be removed from our update distribution list,
please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at:
http://updates.kw-llp.com
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