Compliance with the New Risk-Based Pricing Rule


A new rule, issued by the Federal Reserve Board and the Federal Trade Commission, requires any company that uses a credit report or score in connection with a credit decision – including companies such as banks, mortgage bankers, auto lenders, retailers, and public utilities to send notice to a consumer when, based on a credit report or score, the company grants credit on “material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers.” See 12 C.F.R pt. 222, 16 C.F.R pt. 640. While these terms are inherently subjective and difficult to define, creating a potential compliance headache for creditors, the Agencies have provided companies with a wide variety of compliance options depending on the business in which they are engaged. Understanding how these options fit together is critical to developing an effective compliance program. In this client alert, we unpack the new rule and offer a succinct summary of these compliance options, including a special section outlining the options by line of business.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.