Federal Reserve and FTC Propose Credit Score Disclosure Rules

Morrison & Foerster LLP

The Dodd-Frank Act amends the Fair Credit Reporting Act (FCRA) to require companies that use credit scores to include those scores, and related information, in adverse action and Risk-Based Pricing Notices provided to consumers. Yesterday, the Federal Reserve Board (FRB) and Federal Trade Commission (FTC) proposed new rules to implement these provisions. Highlights of the proposals include (a) no proposed changes to the “Credit Score Exception Notices” under the Risk-Based Pricing Rule—meaning that lenders may continue to use existing notices following the effective date of the new requirements; (b) new credit score disclosure language for the Regulation B sample adverse action notices, which could require the disclosure of up to nine reason codes in adverse action notices; and (c) a clarifying statement in the proposals that only one credit score need be disclosed in connection with an adverse action or a Risk-Based Pricing Notice. The proposals are silent on proposed mandatory compliance dates, and, to the extent that a July 21, 2011 compliance date for the new Risk-Based Pricing Notice would present challenges, we recommend that covered persons consider commenting on the proposals. Comments on the proposals will be due 30 days after the notices are published in the Federal Register.

Section 1100F of the Dodd-Frank Act amended section 615 of the FCRA to add credit score disclosure obligations in connection with adverse action and Risk-Based Pricing Notices.

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

Morrison & Foerster LLP on:

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:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.