FCRA, ECOA, RESPA
Purpose of FCRA-Reg V - answer-Purpose is to promote the accuracy and fairness of
credit reporting
-Following groups of individuals are the focus:
>Applicants
>Borrowers
>Insured consumers
>Employees
>Guarantors (limited coverage)
-Do not generally apply to transactions with business entities or non-personal purposes
FCRA is a federal law that addresses the rights and obligations of the following 4
groups - answer-Consumer reporting agencies
-Users of consumer information
-Furnishers of consumer information
-Consumers
Consumer Reporting Agencies (CRA) - answer-Entities that collect and disseminate
information in the form of a consumer report to be used for credit evaluation,
employment, and insurance
-Generally refers to nationwide CRA (NCRA): Equifax, TransUnion, Experian
-Includes deposit history reporters: Telechex, ChexSystems
Investigative reports under FCRA - answerSpecial type of consumer report in which
information about a consumer's character, general reputation, personal characteristics,
and mode of living is obtained through personal interviews.
Information on Consumer Report for FCRA - answer-Only credit accounts or public
records involving debt, civil judgements, bankruptcy or tax liens appear
- Must include:
*Credit score and key negative factors
*Notice if report is being disputed by the consumer
*Notice of address discrepancy
*Notice of fraud alerts placed by consumer
*Identification of accounts closed by consumer
-10 years for paid positive accounts
-7 years for delinquencies from the date of initial missed payment after which account
was never again current
-10 years for bankruptcy
-Info that remain indefinitely:
*Positive open credit
, *Credit transaction involving amount of $150,000 or more
*I fo about a job with a salary of more than $75,000
*Application for credit or life insurance for more than $150,000
*Tax liens that are not paid
Medical Information Exceptions for FCRA - answer
Information Sharing and Opt-Outs under FCRA - answer-The option to opt-out must last
at least 5 years.
-Upon expiration of the opt-out period, the consumer must be given a renewal notice
and opportunity to renew the opt-out before information received from an affiliate may
be used to make solicitations to the consumer.
Disclosures for prescreened offers under FCRA - answerProvide both the short notice
and long notice with each written consumer solicitation.
Credit score disclosures under FCRA - answer-Use H-3 Model Credit Score Exception
Notice (CSEN) which incorporates Notice to Home Loan Applicants (NHLA) and the
FCR notice for all home loan applicants (open end or closed end secured by 1 to 4
family residential real properties) for education regardless if the loan is approved or
declined.
-Risk Based Pricing Notice (RBPN) complements the Adverse Action Notice (AAN).
Used to educate the segment of consumers that were approved but at less than best
terms.
-RBPN is only required for non-mortgage consumer loan transactions when the creditor
uses a tiered pricing structure and the consumer was approved but did not receive the
creditor's top tier pricing.
-RBPN is required for consumer purpose credit, but not business credit
-RBPN is not required if an adverse action notice is provided when credit is denied and
not required for prescreened solicitations.
-Neither the RBPN nor the CSEN applies if the creditor does not price based on risk (i.e.
if loan is approved, all applicants get the same terms).
Proprietary score exception under FCRA - answer-A numerical value or categorization
derived from a statistical tool or modeling system used by a person who makes or
arranges a loan to predict the likelihood of certain credit behavior.
-If this score includes information that is external to the credit report, the proprietary
score does not have to be disclosed.
Adverse action notice under FCRA (AAN) - answer-Include all credit, insurance, and
employment actions affecting consumers that can be considered to have a negative
impact.
-Business applicants are entitled to an AAN, including credit score information, if a
consumer report is a factor in decision.
-Lender must provide a separate notice to each consumer applicant that contains a
credit score exception notice (if mailed, each notice enclosed in separate, sealed
Purpose of FCRA-Reg V - answer-Purpose is to promote the accuracy and fairness of
credit reporting
-Following groups of individuals are the focus:
>Applicants
>Borrowers
>Insured consumers
>Employees
>Guarantors (limited coverage)
-Do not generally apply to transactions with business entities or non-personal purposes
FCRA is a federal law that addresses the rights and obligations of the following 4
groups - answer-Consumer reporting agencies
-Users of consumer information
-Furnishers of consumer information
-Consumers
Consumer Reporting Agencies (CRA) - answer-Entities that collect and disseminate
information in the form of a consumer report to be used for credit evaluation,
employment, and insurance
-Generally refers to nationwide CRA (NCRA): Equifax, TransUnion, Experian
-Includes deposit history reporters: Telechex, ChexSystems
Investigative reports under FCRA - answerSpecial type of consumer report in which
information about a consumer's character, general reputation, personal characteristics,
and mode of living is obtained through personal interviews.
Information on Consumer Report for FCRA - answer-Only credit accounts or public
records involving debt, civil judgements, bankruptcy or tax liens appear
- Must include:
*Credit score and key negative factors
*Notice if report is being disputed by the consumer
*Notice of address discrepancy
*Notice of fraud alerts placed by consumer
*Identification of accounts closed by consumer
-10 years for paid positive accounts
-7 years for delinquencies from the date of initial missed payment after which account
was never again current
-10 years for bankruptcy
-Info that remain indefinitely:
*Positive open credit
, *Credit transaction involving amount of $150,000 or more
*I fo about a job with a salary of more than $75,000
*Application for credit or life insurance for more than $150,000
*Tax liens that are not paid
Medical Information Exceptions for FCRA - answer
Information Sharing and Opt-Outs under FCRA - answer-The option to opt-out must last
at least 5 years.
-Upon expiration of the opt-out period, the consumer must be given a renewal notice
and opportunity to renew the opt-out before information received from an affiliate may
be used to make solicitations to the consumer.
Disclosures for prescreened offers under FCRA - answerProvide both the short notice
and long notice with each written consumer solicitation.
Credit score disclosures under FCRA - answer-Use H-3 Model Credit Score Exception
Notice (CSEN) which incorporates Notice to Home Loan Applicants (NHLA) and the
FCR notice for all home loan applicants (open end or closed end secured by 1 to 4
family residential real properties) for education regardless if the loan is approved or
declined.
-Risk Based Pricing Notice (RBPN) complements the Adverse Action Notice (AAN).
Used to educate the segment of consumers that were approved but at less than best
terms.
-RBPN is only required for non-mortgage consumer loan transactions when the creditor
uses a tiered pricing structure and the consumer was approved but did not receive the
creditor's top tier pricing.
-RBPN is required for consumer purpose credit, but not business credit
-RBPN is not required if an adverse action notice is provided when credit is denied and
not required for prescreened solicitations.
-Neither the RBPN nor the CSEN applies if the creditor does not price based on risk (i.e.
if loan is approved, all applicants get the same terms).
Proprietary score exception under FCRA - answer-A numerical value or categorization
derived from a statistical tool or modeling system used by a person who makes or
arranges a loan to predict the likelihood of certain credit behavior.
-If this score includes information that is external to the credit report, the proprietary
score does not have to be disclosed.
Adverse action notice under FCRA (AAN) - answer-Include all credit, insurance, and
employment actions affecting consumers that can be considered to have a negative
impact.
-Business applicants are entitled to an AAN, including credit score information, if a
consumer report is a factor in decision.
-Lender must provide a separate notice to each consumer applicant that contains a
credit score exception notice (if mailed, each notice enclosed in separate, sealed
