FAIR CREDIT REPORTING ACT

FCRA - FREE CREDIT REPORT COMPLIANCE

4. A consumer may obtain one free credit report each year from each of the three bureaus, Experian, Transunion and Equifax, however, a loan originator may not provide a copy of the report pulled by the originator to the consumer.

AUTHORITY

FEDERAL TRADE COMMISSION (FTC)

CONSUMER CREDIT PROTECTION ACT - CCPA

The Consumer Credit Protection Act of 1968 (CCPA), protects employees from being fired because their wages have been garnished for any one debt, and limits the amount of any employee's earnings that may be garnished in any one week.

FACTA-COMPLIANCE DESTRUCTION OF RECORDS

1. A loan originator shall adopt procedures to assure that consumer credit reports not retained in a consumer's file be destroyed, to prevent "dumpster divers" from accessing personal data to be used in identity theft.

ADVERSE ACTION

Denying or canceling offers to extend credit, or changing the terms of the credit being offered to less favorable terms

TILA FAST FACT

IMU Fun Fact! Indicating that the figures contained in the initial TIL are estimates does not relieve the lender of accurately disclosing the APR..

FACTA-FAIR AND ACCURATE CREDIT TRANSACTIONS ACT

The Fair and Accurate Credit Transactions Act of 2003 (FACTA) added new sections to the Federal Fair Credit Reporting Act, intended to primarily help consumers fight the growing crime of identity theft. Accuracy and privacy of information provided regarding a consumers credit profile, limits put on information sharing, and providing consumers with new rights regarding disclosure of information shared are included in FACTA. FACTA is designed to focus primarily on the creditors and the credit reporting agencies.

HOEPA LIMITATIONS

following: 1. Balloon Payments. A payment schedule with regular periodic payments that when aggregated do not fully amortize the outstanding principal balance. In most cases, balloon payments are not allowed for a loan with a term of less than five (5) years. The balloon payment prohibition does not apply to loans with maturities of less than one (1) year if the loan is a bridge loan connected with the acquisition or construction of a dwelling intended to become the consumer's principal dwelling.

HOEPA-HOME OWNERSHIP EQUITY PROTECTION ACT

The Home Ownership and Equity Protection Act of 1994 (HOEPA), imposes disclosure requirements and substantive limitations on certain closed-end mortgage loans bearing rates or fees above a certain percentage or amount.

FACTA-COMPLIANCE CREDIT SCORES

1. A loan originator shall provide the Notice to Home Loan Applicant - Credit Score Information Disclosure to the consumer, properly filled out, at the time that a consumer credit report is obtained. This disclosure shall include the scores given by each bureau, and the major factors affecting the scores.

HOEPA-1ST LIEN THRESHOLD

1. First Lien Home Equity Loans. A loan is covered by HOEPA if the loan's APR exceeds the yield of a Treasury security with a comparable maturity by more than 8 percentage points.

FCRA COMPLIANCE

1. Loan originators who take adverse action against a borrower based on information in a credit report shall provide written notice to the borrower explaining why. 2. Loan originator who take adverse action against a borrower based on information provided by a person other than a consumer credit reporting agency, shall provide clear and concise notice to the borrower of their right to obtain disclosure regarding the nature of the information within 60 days.

FACTA-COMPLIANCE ACTIVE DUTY/FRAUD ALERTS

2. A loan originator should take reasonable steps to confirm that an application for credit has not been submitted by an identity thief if a "fraud alert" or "active duty" alert has been placed in a consumer's credit file.

HOEPA-BALLOON PAYMENTS

2. In the limited circumstances where balloon payments are permitted, they must be disclosed to consumers along with the amount of the regular monthly payment.

HOEPA-SUBORDINATE LIEN THRESHOLD

2. Subordinate Lien Home Equity Loans. A subordinate lien loan is covered by HOEPA if the loan's APR exceeds the yield of a Treasury security with a comparable maturity by more than 10 percentage points.

FCRA - FRAUD ALERT COMPLIANCE

3. Loan originators who discover that a fraud alert or active military duty alert has been placed in a consumer's file, will implement reasonable procedures to confirm that the originator knows the identity of the consumer in person or by telephone conversation at a number designated by the consumer.

FCRA - ORIGINATOR PERMISSABLE USE

5. A loan originator should not rely upon or act upon information contained in a consumer's credit report if such report has not been prepared exclusively for loan originator's use.

HOEPA-REFINANCE DISCLOSURE

In refinances, the total amount borrowed must be disclosed to consumers and must state whether premiums or other charges for optional credit disability insurance are included

TILA AUTHORITY

THE FEDERAL RESERVE BOARD

FAIR CREDIT REPORTING ACT - FCRA

The Fair Credit Reporting Act of 1970 ensures that consumer reporting agencies use procedures which are fair and equitable to the consumer with regard to the confidentiality, accuracy, and relevancy of personal information. It also ensures credit reporting is only used for allowable purposes such as: • Credit or insurance analysis. • Employment purposes. • Court orders. • Eligibility determination for government-granted benefits. • Legitimate business transaction needs. • Upon express written instructions of the consumer.