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              July 7, 2011     

                                                   FRB and FTC

                                           Credit Score Disclosures - Final Rules


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On July 6, 2011, the Federal Reserve Board (FRB) and the Federal Trade Commission (FTC) jointly issued final rules (Rules) to implement the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Our previous notifications were on 1-3-11, and 3-2-11.

If a credit score is used in setting material terms of credit or in taking adverse action, the statute requires creditors to disclose credit scores and related information to consumers in notices under the Fair Credit Reporting Act (FCRA).

The Rules amend Regulation V (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 also amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements.


The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected soon.

Effective Date: July 21, 2011

REGULATION V
The Rules amend Regulation V (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.

Section 1100F of the Dodd-Frank Act (Dodd-Frank) amends section 615(h) of the FCRA to require that additional content be disclosed to consumers in risk-based pricing notices; specifically, if a credit score is used in making the credit decision, the creditor must disclose that score and certain information relating to the credit score.

Rulewriting authority for the risk-based pricing provisions of the FCRA, including the amendments prescribed by section 1100F of the Dodd-Frank, will not be vested in the Consumer Financial Protection Bureau until the date that the section 1100F amendments become effective.
REGULATION B
The Rules also amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements.

Section 1100F of the Dodd-Frank Act amends section 615(a) of the FCRA to require creditors to disclose on FCRA adverse action notices a credit score used in taking any adverse action and information relating to that score.

The FRB is issuing revised model adverse action notices substantially as proposed, and revised to the extent necessary for the adverse action model notices in Regulation B to be consistent with the requirements of section 1100F of the Dodd-Frank.
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FRB: 12 CFR Part 222, Regulation V and

FTC: 16 CFR Parts 640 and 698

Fair Credit Reporting Risk-Based Pricing Regulations

July 6, 2011

 

FRB: 12 CFR Part 202, Regulation B

Equal Credit Opportunity

Final Rule

July 6, 2011

 

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