Tell us
what you think
Our Sponsors
 |
Our Sponsors
|
Question & Answer
Question:We are having trouble sorting out the way to treat certain counteroffers under FCRA when the reason we are making a counteroffer is based on information in the applicant's credit report. The new act appears to say that we can treat this type of counteroffer in the same way as Regulation B - if the applicant accepts it, it does not require the FCRA notification. However, the Federal Trade Commission's staff commentary appears to interpret this differently. Should we give the FCRA notice?
Answer:No. The amendments to the act over-ride the interpretations that were in place when the amendments were passed by Congress. The correct interpretation of the meaning of adverse action for FCRA purposes is to look to ECOA and Regulation B interpretations. The FTC has simply not updated this part of its commentary to reflect the changes.
As a result, if you make a counteroffer to an applicant and information in their consumer report provided by the credit bureau was what caused you to make a counter-offer rather than to approve the loan as requested, the action would only be adverse action if the applicant rejected the counter-offer. This means that you can make a counter-offer without simultaneously giving the FCRA notice.
Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 10, 8/99
Rate This Article
Current Rating For the Feature:
| Total Ratings for this Feature: 0 |
|