Amendments to Reg V

The Federal Reserve Board's Regulation V houses FRB rules to implement the Fair Credit Reporting Act. At the moment, the changes proposed are generated by the FACT Act. Proposed in early April is a notice to implement Section 217 of the FACT Act which requires a "clear and conspicuous" notice to consumers when negative credit information is reported. The term negative information includes information about delinquencies, late payments, insolvency or default.

As proposed, the notice to customers could take a variety of forms. For example, it could be included on a notice of default or a billing statement. However, it may not be included in initial disclosures as it is an event-triggered notice.

The proposed notice is straightforward: "We [may provide][have provided] information to credit bureaus about an insolvency, delinquency, late payment, or default on your account to include in your credit report."

The proposal does not address or provide specific guidance on standards for making the notice clear and conspicuous.

Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 4, 5/04