Dodd-Frank Act Increases Disclosure Requirements for Financial Institutions and Other Businesses Which Make Decisions Based on Credit Scores
On July 15, 2011, the Federal Reserve Board (“the Board”) and the Federal Trade Commission (“FTC”) published final rules in the Federal Register implementing the credit score disclosure requirements contained in Section 1100F of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). If a credit score is used to set material terms of credit or to take any type of adverse action, the Dodd-Frank Act requires disclosure of the credit score and related information to consumers in Fair Credit Reporting Act (“FCRA”) notices. One of the final rules amended certain model notices in the Equal Credit Opportunity Act’s (“ECOA”) Regulation B, combining the adverse action notice requirements for the ECOA and the FCRA to reflect the new credit score disclosure requirements. The other rule, issued jointly with the FTC, amended Regulation V (related to fair credit reporting) 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 rules were issued before general rulemaking authority under these statutes was transferred to the Consumer Financial Protection Bureau (“CFPB”), which began formal operations on July 21, 2011.
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