Credit Reporting Agencies and Financial Regulations

Balance on a credit card/loan

The amount of money owed on a credit card or loan.

Customer/Consumer

A customer is a person who has an established business relationship, while a consumer is an individual who has done business with but doesn't continue to do business with.

Certificate of Eligibility (COE)

A document that confirms a borrower's eligibility for a VA loan and indicates the amount of their entitlement.

Energy Efficient Mortgage (EEM)

A loan that allows borrowers to finance energy-efficient improvements along with the cost of the property.

Temporary 2-1 buydown

A mortgage agreement that provides the borrower with a lower interest rate for the first two years of the loan.

Federal Housing Administration (FHA)

A part of HUD that insures mortgages and provides mortgage insurance on loans made by approved lenders.

Do Not Call Registry (DNC)

A registry that allows consumers to place their telephone numbers on a list to prohibit telemarketers from calling them, unless they meet certain criteria.

Suspicious Activity Report (SAR)

A report that financial institutions must file whenever there is a suspected case of money laundering or fraud.

Safeguards Rule

A rule under the GLBA that focuses on information security and requires financial organizations to protect customer information.

Financial Privacy Rule

A rule under the GLBA that requires financial institutions to provide customers with a clear and detailed notice of their privacy policies and practices.

Truncation of credit card and debit card account numbers

A section under the FACT ACT that prohibits businesses from printing more than 5 digits of the card number or the expiration date on any receipt.

Establishment of procedures for the identification of possible instances of identity theft (Red Flag Rules)

A section under the FACT ACT that requires financial institutions to establish and maintain guidelines for identifying possible instances of identity theft.

Disposal of consumer report information and records

A section under the FACT ACT that requires proper disposal of consumer report information and records by any person that maintains or possesses such information.

Adverse Action Notice

Also known as a denial letter, it is the notice provided to a borrower when they are denied credit based on their credit report.

Bank Secrecy Act/Anti Money Laundering (BSA/AML)

An act that establishes provisions for requesting cancellation and termination of PMI and fights against money laundering and financing of terrorism.

Credit Reporting Agencies

Companies that compile, sell, and collect account information about borrowing and repayment history to report on the credit report.

Items sent to collections or being disputed

Debts or charges that have been sent to a collections agency or are being disputed by the borrower.

Charities and tax-exempt nonprofit organizations, Political campaigns, Callers taking surveys or polls

Entities exempted from the Do Not Call Registry rules.

FraudAlertissuedduetoidentitytheft, ConsumerisUNemployedandplanstoapplyforajobinthenext60days, ConsumergetsDeniedbasedoncredit, Inaccurateinformationwhichappearsonyourcreditreport, IftheconsumerreceivesPublicassistance

Instances where a consumer can get a free copy of their credit report under the FCRA.

Public records such as judgments and bankruptcies

Legal records of judgments or bankruptcies that are part of the public record and may affect the borrower's creditworthiness.

USDA loans

Loans that require no down payment and offer 100% financing for eligible borrowers in rural areas.

Freeze, Fraud Alerts and Active Duty Alerts

Sections under the FACT ACT that help prevent identity theft by allowing consumers to freeze their credit, place fraud alerts, and active duty alerts.

CFPB

The Consumer Financial Protection Bureau, which enforces the Fair Credit Reporting Act (FCRA).

HUD

The Department of Housing and Urban Development, responsible for providing housing and community development assistance and ensuring fair and equal housing access.

VA

The Department of Veterans Affairs, which guarantees loans made to eligible veterans and service members.

FACT ACT

The Fair and Accurate Credit Transactions Act of 2003, which is an amendment of the FCRA.

FCC and FTC

The Federal Communications Commission and the Federal Trade Commission, which created the Do Not Call Registry.

FFIEC

The Federal Financial Institutions Examination Council, which is an interagency body that prescribes uniform principles, standards, and report forms for banking regulators.

FTC

The Federal Trade Commission, which enforces the Do Not Call Registry.

FTC

The Federal Trade Commission, which enforces the Gramm-Leach-Bliley Act (GLBA).

GLBA

The Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999.

USDA

The United States Department of Agriculture, which provides loans and grants to help low- to moderate-income individuals or households purchase homes in rural areas.

Pretexting

The act of collecting information under false pretenses, which is prohibited under the GLBA.

Federal Housing Finance Agency (FHFA)

The agency responsible for the supervision, regulation, and oversight of Fannie Mae and Freddie Mac.

Residual income

The amount of money left over each month after paying all monthly expenses, considered by the VA for loan eligibility.

When the borrower gives consent and there is a purpose

The conditions under which it is permissible to obtain a credit report on a borrower.

Payment status

The current status of payments on a credit card or loan (e.g. paid, late, delinquent).

5 years

The duration for which a Suspicious Activity Report (SAR) must be kept from the date of filing.

Judgments (7 years), paid tax liens (7 years), bankruptcies (7-10 years), unpaid tax liens (indefinite)

The duration for which outdated information like judgments, tax liens, and bankruptcies can remain on a credit report under the FCRA.

31 days, 24 months

The frequency of checking and updating the Do Not Call Registry by telemarketers subject to its rules, and the period for which documented records must be kept.

31/43%

The front end and back end debt-to-income ratios for a VA mortgage.

The borrower's credit score

The information provided to the borrower in the Credit Score Disclosure, which is usually given with the Notice to The Home Loan Applicant.

Name, address, and phone number of the credit reporting agency

The information that a creditor must provide to a borrower if they are denied credit based on their credit report.

Original loan amount

The initial amount of money borrowed from a lender.

Credit limit on a credit card

The maximum amount of credit that a credit card holder is allowed to borrow.

Up to 5 years in prison and $10,000 for individuals, $100,000 for financial institutions

The penalty for fraudulently obtaining personal information under the GLBA.

$50,120

The penalty for violating the Do Not Call Registry in 2023.

$500 per unauthorized fax, trebled damages of $1,500 for knowingly doing it

The penalty for violating the Do Not Fax rules.

Up to $1,000

The penalty for violating the FCRA, which can be imposed on the violator.

Identity theft

The primary concern addressed by the FACT ACT, which provides provisions to prevent and protect consumers from identity theft.

TransUnion, Experian, and Equifax

The three leading credit reporting agencies targeted by the FCRA.

$5,000 or more, within 30 days if identifiable, within 60 days if not identifiable

The threshold for filing a Suspicious Activity Report (SAR) and the time frame for reporting it.

Two years after the date the violation was discovered or within five years of the date the violation occurred

The time frame within which a consumer can sue for a violation of the FCRA, whichever happens sooner.

A notification must be given within 30 days

The time frame within which a credit reporting agency must notify a borrower before adding negative information to their credit report.

30 days

The time frame within which a mistake on a credit report must be corrected under the FCRA.

Deposits, withdrawals, money exchange, or other payment/transfer of more than $10,000 cash per day

The trigger for a bank to electronically file a Currency Transaction Report (CTR) under the BSA/AML.