Week 3 - Fair Credit Reporting Act
(FCRA)
Purpose of FCRA - answer To regulate the consumer credit reporting and related
industries to ensure that consumer information is reported in an accurate, timely, and
complete manner; to give individuals information when consumer reports are used to
evaluate credit applications; and to protect the confidentiality of information. The act
places obligations on consumer reporting agencies and on users of consumer reports.
Bank products impacted by FCRA - answer Credit, deposit accounts, insurance,
employment, and child support
Consumer report - answerAny written or oral communication bearing on a consumer's
individual credit worthiness or general reputation that is collected to establish the
consumers eligibility for
1. credit or insurance to be used for personal, family or household purposes,
2. employment purposes, or
3. any other authorized purposes
Consumer report does not include - answer1. A report containing information only on
the transactions or experiences between the consumer and the person making the
report
2. The sharing of experience information between affiliates
3. The communication of other information among persons related by common
ownership or by corporate control, if it is clearly and conspicuously disclosed to the
consumer that information may be shared by affiliates and the consumer is given the
opportunity to opt out before the time the information is shared
4. The authorization or approval of a specific extension of credit directly or indirectly by
the issuer of a credit card
5. A report in which a person who has been requested by a third-party to extend credit
directly or indirectly to a consumer, provided the third-party advises the consumer of the
name and address of the person requesting the report and the required disclosures are
given
6. And investigative consumer report for a prospective employer that has been
previously authorized by the consumer
Consumer reporting agency - answerAnyone who regularly engages in assembling or
evaluating consumer credit or other information to furnish consumer reports to third
parties. Among other responsibilities it must purge obsolete information and it may
report negative credit information for no longer than seven years and bankruptcies for
, no longer than ten years unless the information is related to credit or insurance for
$150,000 or more.
Permissible purposes for providing consumer reports - answer1. If authorized in writing
by the consumer
2. In response to a court order having jurisdiction or a subpoena issued by the federal
grand jury or review or collection of an account of the consumer
3. In connection with a credit or insurance transaction
4. For employment purposes however before procuring a consumer report, an employer
must disclose to the individual in writing that a consumer report may be obtained and
must obtain written authorization from the individual before procuring the report
5. To a person with a legitimate business need for the information:
- in connection with the business transaction initiated by the consumer or
- to review an account to determine whether the consumer continues to qualify for terms
- for use by a potential investor or servicer
- for business purpose transactions if the consumer is or will be personally liable for the
businesses' debt
6. To a financial institution, to obtain prescreened Consumer Reports to make firm
offers of credit or insurance unless consumers have elected to opt out of being included
on prescreened lists
Requirements for users of consumer reports - answer1. Give an oral, written, or
electronic disclosure to a consumer when information from a consumer reporting
agency contributes in whole or in part to take an adverse action against the consumer.
Adverse actions include:
1. I denial of consumer credit or insurance
2. The refusal to open a checking account
3. An adverse change in terms of consumer credit or insurance such as refusing to
renew a policy, credit card, or line of credit
4. The denial of employment
Adverse decision notification requirements when using credit reporting agency
information - answer1. The name, address, and telephone number of the consumer
reporting agency (including a toll-free number if the agency maintains files on a
nationwide basis)
2. State that the consumer reporting agency did not make the decision, nor can it speak
specifically to the reasons for the adverse action
3. Inform the consumer of the right to obtain a free copy of the consumer credit report
within 60 days
4. Inform the consumer of the right to dispute the accuracy or completeness of any
information contained in the consumer credit report
Adverse decision notification requirements when using credit information from a third-
party - answerIf credit information received from a third-party including an affiliate, is
used to make the adverse decision, the user must
(FCRA)
Purpose of FCRA - answer To regulate the consumer credit reporting and related
industries to ensure that consumer information is reported in an accurate, timely, and
complete manner; to give individuals information when consumer reports are used to
evaluate credit applications; and to protect the confidentiality of information. The act
places obligations on consumer reporting agencies and on users of consumer reports.
Bank products impacted by FCRA - answer Credit, deposit accounts, insurance,
employment, and child support
Consumer report - answerAny written or oral communication bearing on a consumer's
individual credit worthiness or general reputation that is collected to establish the
consumers eligibility for
1. credit or insurance to be used for personal, family or household purposes,
2. employment purposes, or
3. any other authorized purposes
Consumer report does not include - answer1. A report containing information only on
the transactions or experiences between the consumer and the person making the
report
2. The sharing of experience information between affiliates
3. The communication of other information among persons related by common
ownership or by corporate control, if it is clearly and conspicuously disclosed to the
consumer that information may be shared by affiliates and the consumer is given the
opportunity to opt out before the time the information is shared
4. The authorization or approval of a specific extension of credit directly or indirectly by
the issuer of a credit card
5. A report in which a person who has been requested by a third-party to extend credit
directly or indirectly to a consumer, provided the third-party advises the consumer of the
name and address of the person requesting the report and the required disclosures are
given
6. And investigative consumer report for a prospective employer that has been
previously authorized by the consumer
Consumer reporting agency - answerAnyone who regularly engages in assembling or
evaluating consumer credit or other information to furnish consumer reports to third
parties. Among other responsibilities it must purge obsolete information and it may
report negative credit information for no longer than seven years and bankruptcies for
, no longer than ten years unless the information is related to credit or insurance for
$150,000 or more.
Permissible purposes for providing consumer reports - answer1. If authorized in writing
by the consumer
2. In response to a court order having jurisdiction or a subpoena issued by the federal
grand jury or review or collection of an account of the consumer
3. In connection with a credit or insurance transaction
4. For employment purposes however before procuring a consumer report, an employer
must disclose to the individual in writing that a consumer report may be obtained and
must obtain written authorization from the individual before procuring the report
5. To a person with a legitimate business need for the information:
- in connection with the business transaction initiated by the consumer or
- to review an account to determine whether the consumer continues to qualify for terms
- for use by a potential investor or servicer
- for business purpose transactions if the consumer is or will be personally liable for the
businesses' debt
6. To a financial institution, to obtain prescreened Consumer Reports to make firm
offers of credit or insurance unless consumers have elected to opt out of being included
on prescreened lists
Requirements for users of consumer reports - answer1. Give an oral, written, or
electronic disclosure to a consumer when information from a consumer reporting
agency contributes in whole or in part to take an adverse action against the consumer.
Adverse actions include:
1. I denial of consumer credit or insurance
2. The refusal to open a checking account
3. An adverse change in terms of consumer credit or insurance such as refusing to
renew a policy, credit card, or line of credit
4. The denial of employment
Adverse decision notification requirements when using credit reporting agency
information - answer1. The name, address, and telephone number of the consumer
reporting agency (including a toll-free number if the agency maintains files on a
nationwide basis)
2. State that the consumer reporting agency did not make the decision, nor can it speak
specifically to the reasons for the adverse action
3. Inform the consumer of the right to obtain a free copy of the consumer credit report
within 60 days
4. Inform the consumer of the right to dispute the accuracy or completeness of any
information contained in the consumer credit report
Adverse decision notification requirements when using credit information from a third-
party - answerIf credit information received from a third-party including an affiliate, is
used to make the adverse decision, the user must
