FCRA

Under FCRA, what is a person?

Any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity

for automobile transactions made through an auto dealer that is unaffiliated with the institution, the institution may provide the RBP notice_______

the same time periods as closed-end credit ie, after the decision to approve a credit request is communicated to the consumer but before consummation of the transaction

What is the purpose of the RBP notice?

To primarily improve the accuracy of consumer reports by alerting consumers to the existence of negative information in their consumer reports so that the consumers can, if they choose, check their consumer reports for accuracy and correct any inaccurate information.

True or False: Examiners should confirm that the institution certifies to the consumer reporting agency the purpose for which it will be obtaining reports

True. The certification is usually contained in a financial institutions contract with the CRA

How long does a card issuer have to assess the validity of a change of address if it receives one for a consumers credit or debit card?

Within a short period of time afterwards, during at least the first 30 days after it receives such notification

For account reviews, the RBP notice must be provided __________

at the time that the decision to increase the APR is communicated to the consumer Note: if no notice of the increase in the APR is provided to the consumer prior to the effective date of the APR change, the notice must be provided no later than 5 days after the effective date of the APR change

Under FCRA, what are employment purposes?

Used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee

Section 605(g) provides that persons, including financial institutions that accept debit and credit cards for the transaction of business will be prohibited from issuing electronic receipts that contain more than the last ______ digits of the card number and ______ ______ _____ at the point of sale or transaction

Five Card expiration dates

Can a creditor take a consumers physical, mental, or behavioral health, condition or history, type of treatment, or prognosis into account as part of any such determination?

No

Do RBP requirements apply to card issuers if the credit card program offers only a single annual APR (other than temporary initial rates or penalty rates) or if the issuer offers the consumer the lowest possible APR under the credit card program?

No

Is an institution required to provide a RBP notice to a consumer under section 1022.72(a) or (c) if the extension of credit is not or will not be secured by one to four units of residential real property?

No

On a long notice, can the font type size be smaller than 8pt type?

No

How many days does a furnisher have to notify the consumer reporting agency of the month and year of delinquency?

No later than 90 days

How long must initial fraud and active duty alerts remain in a consumers credit report?

No less than 90 days. In addition, members of the armed services who are called to active duty may also request that active duty alerts be placed in their consumer reports. Active duty alerts must remain in these service members files for no less than 12 months

How long does a FI have to disclose the nature of the information received from an affiliate after receiving a request from the consumer?

Not later than 30 days

The FCRA requires any prospective _______ of a consumer report, for example a lender, insurer, landlord, or employer, among others, to have a legally purpose to obtain a report

user

What are the two methods for making direct comparisons between consumers?

-Credit Score Proxy Method -Tiered Pricing Method

The direct dispute requirements dont apply to a furnisher if the direct dispute relates to:

-consumers identifying information such as names, DOB,SSN, telephone number, address -identity of past or present employers -information derived from public records -information related to fraud alerts or active duty alerts -information provided to a consumer reporting agency by another furnisher

The FCRA allows a consumer reporting agency to furnish a consumer report for which circumstances and no other?

-in response to a court order or federal grand jury case -in accordance with the written instructions of the consumer -to a person, including a financial institution which it has reason to believe: a. intends to use the report in connection with a credit transaction involving the consumer b. intends to use the information for employment purposes c. intends to use the information in connection with the underwriting of insurance involving the consumer d. intends to use the information in connection with a determination of the consumers eligibility for a license or other benefit granted by a governmental instrumentality that i required by law to consider an applicants financial responsibility e. intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation f. otherwise has a legitimate business need for the information in connection with a business transaction that is initiated by the consumer or to review an account to determine whether the consumer continues to meet the terms of the account -in response to a request by the head of a state or local child support enforcement agency (or authorized appointee) if the person certifies various information to the consumer reporting agency regarding the need to obtain the report (this generally does not impact a financial institution that is not a consumer reporting agency)

If a financial institution procures an investigative consumer report, or causes one to be prepared, the institution must meet the following requirements:

-institution clearly and accurately discloses to the consumer that an investigative consumer report may be obtained -disclosure contains a statement of the consumers right to request other information about the report and a summary of the consumers rights under the FCRA -disclosure is in writing and is mailed or otherwise delivered to the consumer not later than 3 BUSINESS DAYS after the date on which the report was first requested -the financial institution procuring the report certifies to the CRA that it has complied with the disclosure requirements and will comply in the event that the consumer requests additional disclosures about the report

What should examiners consider initially?

-organization charts -process flow charts -policies and procedures -loan documentation -checklists -computer program documentation

What are the two RBP notice requirements for an account review?

-statement that the FI has conducted an account review of the account using information from a consumer report -Statement that as a result of the review, the APR on the account has been increased based on information from a consumer report

Direct dispute requirements also do not apply if the furnisher has a reasonable belief that the direct dispute is:

-submitted by a credit repair organization -is prepared on behalf of the consumer by a credit repair organization -is submitted on a form supplied to the consumer by a credit repair organization

For instant credit that is granted under an open-end credit plan to a consumer in person or by telephone, the RBP notice may be provided at the earlier of:

-the time of the first mailing to the consumer after the decision is made to approve the credit such as in a mailing containing the account agreement or -within 30 days after the decision to approve credit

What are the relevant factors in determining the significance of a difference in cost?

-type of credit product -term of extension of credit -extent of difference

How can a USER reasonably confirm an address is accurate?

-verifying address with consumer -reviewing its own records -verifying the address through 3rd party sources or -using other reasonable means

Under FCRA, the term "consumer report" does NOT include:

1. any report containing information solely about transactions or experiences between the consumer and the institution making the report 2. any communication of that transaction or experience information among entities related by common ownership or affiliated by corporate control 3. communication of other information among persons related by common ownership or affiliated by corporate control if: -it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons and -the consumer is given the opportunity, before the time that the information is communicated, to direct that the information is communicated, to direct that the information not be communicated among such persons 4. any authorization or approval of a specific extension of credit directly or indirectly by the issues of a credit card or similar device 5. any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer, such as a lender who has received a request from a broker, conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615 6. A communication described in subsection (o) or (x) of section 603 which relates to certain investigative reports and certain reports to prospective employers

How long must a FI maintain the prescreened criteria used for a product?

3 years beginning on the date that the offer was made to the consumer

How long does a financial institution have to provide records of fraudulent transactions to victims of identity theft?

30 days after receipt of request

Under FCRA, what is an investigative consumer report?

A consumer report or portion thereof in which information on a consumers character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information.

What happens under Section 605)h)(1) when there is an address discrepency?

A nationwide credit reporting agency must provide a notice of address discrepancy if the address provided by the user in its request "substantially differs" from the address the NCRA has in the consumers file

What is the timing for a renewal notice?

A reasonable period of time before expiration of opt-out period or any time after the opt-out period but before the solicitation that would have been prohibited by the expired opt-out notice are made to the consumer

If a financial institution has 5 or more tiers (5 total tiers), who receives a risk based pricing notice?

All consumers who dont qualify for the top two, best-priced tiers AND any other tier that, combined with the top two, equals no less than the top 30% and no more than the top 40% of the total number of tiers

If a financial institution has 4 or fewer pricing tiers, who receives a risk based pricing notice?

All consumers who dont qualify for the top, best priced tier

What is a furnisher?

An entity that furnishes information relating to consumers to one or more consumer reporting agencies for inclusion in a consumer report. Note: an entity is not a furnisher when it: -provides information to a CRA solely to obtain a consumer report in accordance with permissible purposes outlines under FCRA -Is acting as a consumer reporting agency as defined in Section 603(f) of the FCRA -Is a consumer to whom the furnished information pertains or -Is a neighbor, friend, or associate of the consumer or another individual with whom the consumer is acquainted

Under FCRA, what is a consumer

An individual

Under FCRA, what is a consumer reporting agency?

Any person which, for monetary fee, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing reports

Under FCRA, what is a consumer report?

Any written, oral, or other communication of any information by a consumer reporting agency that bears on a consumers creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected, in while or in part, for the purpose of serving as a factor in establishing the consumers eligibility for 1. credit or insurance to be used primarily for personal, family, or household purposes 2. employment purposes 3.any other purpose authorized under section 604

When should the notice to home loan applicant be provided?

As soon as is reasonably practicable after using a credit score.

How long must the opt-out period be effective for?

At least 5 years unless the customer later revokes he opt-out in writing or if the customer agrees electronically

If two joint applicants apply for a mortgage loan to purchase a single-family residence and the lender uses both credit scores, who needs to be disclosed?

Both need to be disclosed if they use both credit scores. Note: If multiple scores are used, all of them can be included in one disclosure containing the Notice to the Home Loan Applicant.

Does Section 609(g) (Disclosure of credit scores by certain mortgage lenders) apply to closed-end, open-end, or both types of loans?

Both that are for consumer purposes and are secured by 1 - 4 family residential real estate properties, including purchase and refi's

What must the short notice of a pre-screened opt out include?

Content, Form, Location

What does materially less favorable mean?

Generally that the cost of credit would be significantly greater than the cost of credit to another consumer from or through the same creditor

What does Section 603 do?

Give consumers the right to restrict the sharing of certain consumer information amongst affiliates

What does Section 624 Affiliate Marketing Opt Out do?

Gives a consumer the right to restrict an entity, with which it does not have a pre-existing business relationship, from using certain information obtained from an affiliate to make solicitations to that consumer

Can a card issuer issue an additional or replacement card until it assesses the validity of the change of address?

No. They "must not" issue until they can assess the validity

Under FCRA, what is adverse action?

It has the same meaning as used in section 701 of ECOA. Under ECOA, it means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the same amount or on terms substantially similar to those requested. Under ECOA, the term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit. Under ECOA, the term has the following additional meanings: -denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance -denial of employment of any other decision for employment purposes that adversely affects any current or prospective employee -a denial or cancellation of, an increase in any charge for or any other adverse or unfavorable change in the terms of any license or benefit described -an action taken or determination that is a. made in connection with an application made by or transaction initiated by, any consumer, or in connection with a review of an account to determine whether the consumer continues to meet the terms of the account, and b, adverse to the interests of the consumer

True or False: The opt out right required under module 2 _____ be contained in a financial institutions _______ ________, as required by the GLBA and its implementing regulations.

Must - privacy notice

How often must an institution recalculate the credit score proxy

No less than every two years Note: Within 1 year after after entering into a new credit business or offering a new product, the institution must recalculate the cutoff scores using its own consumers after it begins using a score derives from market research, a 3rd party, or the party from which it acquired the portfolio

How many credit score and key factors can be disclosed on the notice to home loan applicants?

No more than 4. However if one if the key factor is the number of inquiries into a customers credit information, then the total number of factors shall not exceed 5.

Can a FI make solicitations based on eligibility information it receives from an affiliate after the opt-out period expires?

No unless the consumer receives a renewal notice and opportunity to opt out and the consumer doest renew the opt out or an exception to the notice and opt out requirements applies

Can a financial institution charge a victim of identity theft for records?

No when the conditions are met.

Does a creditor violate the prohibition on obtaining medical information if it receives the medical information pertaining to a consumer in connection with any determination of the consumers eligibility, or continued eligibility, for credit without specifically requesting medical information?

No, however the creditor may only use the medical information in connection with a determination of the consumers eligibility or continued eligibility for credit in accordance with the financial information exception or one of these specific other exceptions provided in the rules.

Does the term "consumer report" include the communication of a specific extension of credit directly or indirectly by the issuer if a credit card or similar device? *Exceptions to FCRA

No, it does not include them

Under 624, can an entity use information received from an affiliate to market its products or services to a consumer?

No, unless the consumer is given notice and a reasonable opportunity and a reasonable and simple method to opt out of the making of such solicitations.

Can font be smaller than 12 point font on a short notice under FCRA?

No. The short notice must be in a type size larger than the principal text but it may not be small than 12 point type.

Does the term consumer report include any report requested by a third party? *Exceptions to FCRA

No. The third party must advise the consumer of the name and address of the financial institution to which the request was made, and such financial institutions makes the adverse action disclosures required by section 615 of the FCRA For example: this exception allows a lender to communicate a credit decision to an automobile dealer who is arranging financing for a consumer purchasing an automobile and who requires a loan to finance the transaction

What is section 609(g)?

Requires FI's that make or arrange mortgage loans using credit scores to provide the score with accompanying information to the applicants

Under FCRA, what are examples of a solicitation?

Telemarketing call, direct mail, email, or other form of marketing communication directed to a particular consumer that is based on eligibility information received from an affiliate

What happens if the customer doesnt have a credit score?

The FI must assume that it is granting credit on materially less favorable terms and thus must provide a RBP notice

Who determines whether a customer has received material terms that are materially less favorable by comparing the material terms offered to the consumer to the material terms offered to other consumers for a specific type of credit product.

The financial institution may determine on a case-by-case basis

True or False: A request for records must be made by the victim of identity theft and be in writing

True

True or False: Every name that appears on a prescreening list is considered an individual consumer report?

True

True or False: FCRA requirements also apply to financial institutions that operate in the following capacities: -Procurers and users of information (for example, as credit grantors, purchasers of dealer paper, or when opening deposit accounts) -furnishers and transmitters of information (by reporting information to consumer reporting agencies or other third parties or to affiliates -Marketers of credit or insurance products or -employers

True

True or False: If a person shares medical information, that person becomes a consumer consumer reporting agency, subject to all of the other substantive requirements of the FCRA

True

True or False: If the FI does not specify an address, then it may not furnish any information relating to a consumer to any consumer reporting agency if the FI knows or has reasonable cause to believe that the information is inaccurate

True

True or False: Section 603(d) of module 2 defines a consumer report to include information about a consumer such as that which bears on a consumers credit worthiness, character, and capacity among other factors

True

True or False: Section 604(g) generally prohibits creditors from obtaining and using medical information in connection with any determination of the consumers eligibility or continued eligibility for credit

True

True or False: The FCRA creates a business disincentive such that if a financial institution shares consumer report information outside of the exceptions, then the institution is a CRA and will be subject to the significant, substantive requirements of the FCRA, applicable to those entities.

True

True or False: The FCRA requires nationwide consumer reporting agencies to jointly operate an "opt-out" system whereby consumers can elect to be excluded from prescreened lists by calling a toll-free number

True

True or False: The affiliate marketing opt-out applies to both transactions or experience information and "other" information, such as information from credit reports and credit applications.

True

True or false: A creditor may use the medical information in a manner and to an extent that is no less favorable than it would use comparable, non-medical information.

True

True or false: Typically a financial institution will structure its information sharing practices within the exceptions to avoid becoming a consumer reporting agency

True

How long does an applicant have to obtain a free copy of their consumer report from the consumer reporting agency?

Within 60 days of receiving notice of the adverse action

What is prescreening?

When a FI obtains a list from a CRA of consumers who meet certain predetermined creditworthiness criteria and who have not elected to be excluded from such lists

What is constructive sharing?

When a financial institution provides criteria to an affiliate to use in marketing the financial institutions product and the affiliate uses the criteria to send marketing materials to the affiliates own customers that meet the criteria.

How long after a dispute investigation begins must it be completed?

Within 30 days. Note: The time period may be extended for 15 days if a consumer reporting agency receives additional relevant information from the consumer

If a consumer alleges they are the victim of identity theft, can they request an extended alert be placed?

Yes and it lasts 7 years Note: Extended alerts require consumers to submit identity theft reports and appropriate proof of identity to nationwide consumer reporting agencies

Do FI's have to provide consumers with an adverse action notice if employment is denied?

Yes if it is based in part or in whole on the consumer report

Rules of construction: For credit score disclosure exception notices, does it matter if the consumers have the same address or not when providing disclosures?

Yes, even if they have the same address, separate notices need to be sent

Can a RBP notice be addressed to two consumers?

Yes, if they have the same address

Can an opt-out be set for more than 5 years?

Yes, including an opt-out that does not expire unless the consumer revokes

Will the GLBA still apply to the sharing of non-public, personal information with non-affiliates third parties?

Yes. Therefore FI's should be aware that sharing information under the FCRA joint user rule may still be limited or prohibited by the GLBA

For closed-end credit, a RBP notice must be provided to the customer _______

after the decision to approve a credit request is communicated to the consumer but before consummation of the transaction

For open-end credit, the RBP notice must be provided________

after the decision to grant credit is communicated to the consumer but before the first transaction under the plan has been made

If a financial institution shares other information with affiliates without providing a notice and an opportunity to opt out, the financial institution may _________

become a CRA subject to all of the other requirements of the FCRA

Under the Gramm-Leach Bliley Act (GLBA), some information sharing may be restricted because_____________

it meets the definition of non-public personal information under the Privacy regulations, therefore sharing it with non-affiliated third parties may be subject to an opt out under the privacy regulations

How many times can a consumer obtain a free report from each of the nationwide consumer reporting agencies?

one from each Credit Reporting Agency during a 12-month period

What is the joint user rule?

under this exception, users of consumer reports, including financial institutions, may share information if they are jointly involved in the decision to approve a consumers request for a product or service, provided that each has a permissible purpose to obtain a consumer report on the individual