FTC Seeks Input Regarding Risk-Based Pricing Rule

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The FTC published a notice of proposed rulemaking that narrows the scope of the Risk-Based Pricing Rule to correspond to changes made to FCRA by the 2010 Dodd-Frank Act.  Specifically, the proposal would amend the Risk-Based Pricing Rule, which requires those who use information from a consumer report to offer less favorable terms to consumers to provide them with a notice about the use of such data, to reflect that the rule applies only to entities that are predominantly engaged in the sale and servicing of motor vehicles, excluding those dealers that directly extend credit to consumers and do not routinely assign the extensions of credit to an unaffiliated third party.  The proposed amendment also adds a definition of ‘‘motor vehicle dealer’’ that defines motor vehicle dealers as those entities excluded from the CFPB’s jurisdiction under the Dodd-Frank Act.

Additionally, in connection with FTC’s periodic review of its rules and guides, the proposal contains a series of questions on which FTC seeks comments. Comments must be submitted by December 22, 2020.

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.

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