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Subject: Fair Credit Reporting and Equal Credit Opportunity Acts--Risk-Based Pricing Notices
Date: September 22, 2011
To: Chief Executive Officers and Compliance Officers of All National Banks, Federal Savings Associations, Department and Division Heads, and All Examining Personnel
Description: Final Rules
On July 15, 2011, the Federal Trade Commission and the Board of Governors of the Federal Reserve System (Board) published final rules1 amending their respective risk-based pricing rules. The rules require disclosing credit scores and information relating to credit scores in risk-based pricing notices if a credit score is used in setting the material terms of credit or in taking adverse action. The rules reflect the new requirements in section 615(h) of the Fair Credit Reporting Act (FCRA) that were added by section 1100F of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. The rules became effective August 15, 2011. Additional details related to each provision are discussed in the following paragraphs.
12 CFR 222—Fair Consumer Reporting (Regulation V)
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 under the FCRA.2 The amended final rule revises the content requirements for risk-based pricing notices and adds related model forms that reflect the new credit score disclosure requirements.3
12 CFR 202—Equal Credit Opportunity (Regulation B)
Regulation B requires creditors to provide a notice to an applicant when adverse action is taken.4 The Board has amended the model notices in Regulation B to include the content required by both the Equal Credit Opportunity Act and the FCRA adverse action provisions, so that creditors can use the model notices in Regulation B5 to include the disclosure of credit scores and related information if a credit score is used in taking adverse action.
For more information on these provisions, please contact your supervisory office, Compliance Policy at (202) 649-5470, or Community and Consumer Law at (202) 649–6350.
Grovetta N. Gardineer