This is what I was trying to say yesterday. The only time the H-3 wouldn't go would be if there is no credit score available. Then you'd have to use H-4. Agreed?

Yes. And thanks, Joker and TR and everyone else, for letting me keep trying to summarize this.

Every residential mortgage loan application will get an H-3 or an H-4 as quickly after the credit pull as possible. They may or may not get an AAN later. No stuffing anything with the AAN. (Whew!)

And thanks for the catch on the H-4, Truff.

and don't forget your H-5 for those rare "no score" folks!

We are going to be using the B-4 model for loans not secured by real estate. This is going to be automatically generated and mailed by the company we pull our credit reports through. This will be going out to all customers, consumer and commercial, that we pull credit on. We have a hard enough time getting our people to pull the correct one (real estate/non-real estate) that to add another pull type to choose from would be a bigger mess. I don't see anything specifically that says we can't mail them to everyone we pull credit on. Have I missed something or will we be okay with this procedure?

Okay - For the no score H-5 option on real estate secured loans, wouldn't we need to include the NTHLA too, even though it isn't part of the model form? Or could we just send the H-3 and show no score and no factors?

And a question on the H-4(non real estate secured) - when do you all plan on giving it to the consumer? We usually close these in a couple of days from the time credit is pulled. I don't see a need in mailing these if we will be closing the loan, just give it to the customer at closing and have them sign it then. We will mail the notice if the loan will be denied. I'd appreciate any thoughts on this.

Does anyone know for sure if, in the unlikely case a customer has no credit score, and the application is for 1-4 family real estate, do you have to provide them the No Score exception notice and the Notice to Home Loan Applicant?

If we are going with the credit score exception notice and will be providing the H-3 or H-5 (if no credit score available) on consumer loans secured by a 1-4 family residence, do we have to give the credit score exception notice (H-4) on our consumer loans that are not secured by a 1-4 family residence?

yes, RC, you basically have 3 exception notices, depending on the circumstances...one of which is for a consumer loan, not secured by 1-4, which contains a beacon score.

sewanee, I would say yes since the NTHLA has been added for convenience...as far as I know, it will still be a required document. There is no indication that it is to be removed from FCRA, whereas these other requirement fall under Reg V (FACTA)

Technically, Regulation V is the Federal Reserve Board's implementing regulations for Fair Credit Reporting. FACTA was merely an amendment to the Fair Credit Reporting Act an is not a stand alone piece of legislation.

Can we send the H-3 along with an adverse action/denial letter or do we need to keep our separate NTHLA to send on denials?

You could use the H-3...nothing says you CANT send it to them...

Randy, I agree with the technicality of the Act and the Regulation..it's just that it appears to me, you would still owe the NTHLA if it applies, regardless of approval or denial.

That requirement remains in FCRA while the RPB info is in V.

The other question is how to do it if they have no score...I would think you would still have to give a NTHLA, but with the no-score exception notice.

Does that sound right to you?

Any person who makes or arranges loans and who uses a consumer credit score, as defined in subsection (f), in connection with an application initiated or sought by a consumer for a closed end loan or the establishment of an open end loan for a consumer purpose that is secured by 1 to 4 units of residential real property (hereafter in this subsection referred to as the “lender”) shall provide the following to the consumer as soon as reasonably practicable:

If there is no score, how can you use it?

That's exactly what I was wondering. I guess the argument could be made that the "0" score could be factored into the loan decision, and therefore the lender has used that score for the decision???

The absence of a credit score does not mean that the credit score is zero. It means that there is no score.....no number.....just my humble opinion. Additionally....

• Information described in subsection (f)
• The verbiage making up the "Notice to the Home Loan Applicant" 609(g)(1)(D)

Subsection (f):

• The current Credit Score
• The range of possible scores
• All of the key factors that adversely affected the credit score
• The date the credit score was created
• The name of the credit reporting agency that provided the score

So the notice would be meaningless if there is no credit score, no factors. And read the actual Notice to the Home Loan Applicant. It makes no sense if there is no credit score.

We are going to have our credit report provider send the appropriate exception credit score disclosure notice whenever a credit report is pulled for a credit request(RE, non-RE, or no score).
We preveiously had a policy in place of using a credit report on file for a subsequent consumer credit request if it was within 6 months. From other posts, we have determined this policy needs to go away and a new credit report needs to be pulled for each new credit request regardless of how close together the separate credit requests are received from the same consumer- even if it was yesterday. Is that really true? Doesn't it affect a consumer's score every time there is a new report?

What about a first mortgage application and a piggyback second to cover closing costs or down payment? We currently use the same credit report for both extensions of credit, will we need to pull two reports going forward?

Beth, I would say no to the simultaneous applications and the need for separate reports, unless your bureau requires it.

At a recent webinar, we were given info from the FTC-March 2010 "As an alternative to providing RBPN, the rules permit creditors to provide all consumers who apply for credit with a free credit score and information about their score"

Any comments?

You would need to utilize the credit score notices - that is the option we have chosen.

So is that the B 1 ?

FCRA has always been interpreted to mean that a creditor should obtain a new report for each transaction. Risk Based Pricing did not change or add anything to that rule.


The consumer is applying for credit. It's not up to the Bank to try to protect or control the consumer's credit score by looking for ways not to obtain one when the consumer applies for a loan.

If a credit report on file is relied upon, must the notice be given again?

You can't use a credit report already on file for a new request.

We are planning on sending the exception notices for approved and denied 1-4 fam RE.

For consumer non-RE, I'm looking at only doing the exception notice for approved apps.

In the commentary (pg 76) of the final rule under the "Final Credit Score Disclosure Exceptions for Credit Secured by Residential Real Property and Non-Mortgage Credit," it states: "Creditors also do not need to provide an exception notice to a consumer if one of the other exceptions applies. For example, consumers who apply for and receive a specific rate or who receive an adverse action notice pursuant to the exceptions under __.74(a) and __74(b), respectively, are not entitled to a notice.

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20091222b1.pdf

Is anyone else understanding it this way?