Exam (elaborations)
Fair Credit Reporting Act (Regulation V and Regulation FF) Questions and Answers 2024
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Fair Credit Reporting Act (Regulation V and Regulation FF)
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Fair Credit Reporting Act (Regulation Vand Regulation FF)
Purpose of Fair Credit Reporting Act (FCRA) - answer1. Governs the collection and use
of consumer information and provides the framework for credit reporting
2. Implements disclosure obligations on users of consumer information.
3. Requires fair, accurate and timely reporting of consumer CREDIT information.
4. Restricts the use of consumer reports, and requires the deletion of obsolete
information.
5. Protects CONSUMERS
Consumer Report - answerA communication bearing on an individual's creditworthiness,
credit standing, credit capacity, character, general reputation, personal characteristics,
or mode of living that is USED TO EVALUATE ELIGIBILITY for
1. consumer credit or insurance for personal household purposes.
2. employment purposes.
3. other permissible purposes
Prohibited Information
1. Judgments and Tax Liens over 7 years old.
2. Collection accounts and charge-offs over 7 years old.
3. Bankruptcies over 10 years old.
4. Medical information provider specifics.
Credit Report - answerGenerally synonymous to "Consumer Report."
Four Key Players in Credit Reporting - answer1. Consumer
a. entitled to privacy protection
b. old data is prohibited
c. permissible purpose is required before a credit report can be obtained and used.
2. Data Furnishers
a. duty of accuracy and integrity of data furnished to a credit bureau.
b. Negative Information Notice
c. Red Flag duties.
d. duty to investigate disputed information.
3. Consumer Reporting Agencies
a. guard access to information - require permissible purpose.
b. ultimate duty for accuracy of data
c. fraud alert responsibility.
d. investigate disputed information.
4. Data Users
, a. must have a permissible purpose.
b. Adverse Action Notice requirement.
c. Fraud Alert duties.
d. Red Flag duties.
e. research discrepancies
Furnisher Regulations - answer1. Identify patterns, practices and specific forms of
activity that could compromise the accuracy or integrity of reported consumer credit
information.
2. Review methods used to furnish information.
3. Examine policies and processes used to investigate and correct inaccuracies.
4. Determine whether Furnishers maintain and enforce effective policies that ensure the
accuracy and integrity of information.
Key Furnisher Responsibilities - answer1. Ensure integrity and accuracy of reported
information.
2. Cannot report information known to be inaccurate.
3. Must update any inaccurate information.
4. Notify Credit Reporting Agencies of information disputed by the consumer.
5. Identify accounts voluntarily closed by a consumer.
6. Notify consumers within 30 calendar days after negative information is reported to a
Credit Reporting Agency.
User Responsibilities - answer1. Obtain consumer reports for permissible purposes
only.
2. Certify to Credit Reporting Agency (CRA) that it will not be used for any other
purpose.
3. Notify consumers of Adverse Action.
4. Pay attention to Fraud Alerts and Active Duty Alerts.
5. Comply with FCRA requirements when a CRA notifies the User of an address
discrepancy.
6. Properly dispose of records containing consumer report information.
7. Provide additional credit score disclosures when using risk-based pricing or optional
credit score exception notices for all consumer applications.
8. Comply with special procedures for:
a. employment consumer reports.
b. use of medical information.
c. employee investigations.
d. pre-screening lists.
9. Comply with FACTA's red flag requirements.
Permissible Purpose - answer1. In response to a court order or Federal Grand Jury
subpoena.
2. In accordance with a Consumer's written instructions.
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