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#223514 - 09/24/04 05:13 PM Re: FACT Act - Negative Notice - Deposit Accounts
Retired DQ Offline
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Retired DQ
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
Thanks for the clarification.
_________________________
Get your facts first, then you can distort them as you please. - Mark Twain

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#223515 - 09/30/04 02:29 PM Re: FACT Act - Negative Notice - Deposit Accounts
RachelD Offline
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Joined: May 2004
Posts: 300
Quote:

Jane Jensen Gell from the FRB spoke Tuesday at the ACB Compliance Conference and specifically addressed this question. She said no notice needs to be given to consumers if negative information is provided to Chexsystems. While it may be a CRA, they don't recognize Chexsystems as a "national" credit bureau, therefore no notice.


I have recieved the same information through a consultant I use and the info that i received was; The question is whether ChexSystems was a “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis" as defined in Section 603(p) of the Fair Credit Reporting Act. The Federal Reserve's reply was that it is not and the Fed verified with the FTC that it is not. Accordingly negative information about a consumer's deposit accounts that may be or is reported to ChexSystems does not trigger the requirement for the negative information reporting notice.

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#223516 - 10/05/04 07:52 PM Re: FACT Act - Negative Notice - Deposit Accounts
Anonymous
Unregistered

I just found this discussion and would like to comment. When I first had word of the notice requirememt I sent an email to the Fed and they responded saying YES ChexSystems is a CRA.

We added the model language to the letter we normally send in such situations and have not had any problems. When I saw Kirchmans comment I called them and told them about the email. They asked for a copy of it but insisted we do not have to send the letter.

Instead of changing our letter again we have left things as they are. Although Jane Gell would not commit herself on whether we are wrong in sending the letter, we decided to leave things the way they are for now until we can get something in writing from the Fed that specifically says ChexSystems is not a CRA.

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#223517 - 10/05/04 09:26 PM Re: FACT Act - Negative Notice - Deposit Accounts
ToTo Offline
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Joined: Apr 2004
Posts: 595
OZ
Chexsystems IS a CRA under the general definition (see FCRA section 603(f)). Additionally, Chexsystems is also a "nationwide specialty" CRA, see FCRA 603(w). BUT, Chexsystems is NOT a 603(p) CRA. Section 217 of FACT, the section we're talking about requiring notice to the consumer, refers to a 603(p) CRA, which Chexsystems is not.

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#223518 - 10/06/04 04:36 PM Re: FACT Act - Negative Notice - Deposit Accounts
Anonymous
Unregistered

I just read the sections as I am having a disagreement with the other members of the compliance committee on this. Is chexsystems not a cra under 603(p) CRA Section 217 of FACT because it reads "...for the purpose of furnishing consumer report to third parties bearing on a consumer's credit worthiness, credit standing or credit capacity....". Can I explain this to others that Chexsystems does not apply as section of the act applies to a nationwide CRA that provides payment information on loans (as opposed to bounced check credits as Chexsystems does)?

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