In giving out the risk-based pricing notices, it is my understanding that we give these notices any time we pull a credit report whether it is for a new loan, renewal, or modiciation.

Is this the way others understand this too?

Need some guidance please.

If you are doing Risk Based Pricing based on the credit report in relation to your renewals, nodifications, and new loans, I would think you need to give the notices. But who gets the notice will depend on which method you are using to comply.

I have heard two different sides on denials. We still give out the notices even if we deny a loan, correct? We just make sure it coincides (sp?) with the type of loan applied? So if I have a loan that is consumer purpose that I am denying, I give out the H-4, correct? Anyone's input will be greatly appreciated!

Risk based pricing notice is for approved loans, prior to consumption of before first trans (for open-end)

Exception notices are as soon as reasonably practical after obtaining report...so, to me, those are likely given regardless of outcome, but not necessarily so.

However, if you are doing a 1-4 and utlimately deny it right after pulling report, you could opt not to give the exception notice, but would still owe the NTHLA...Probably easier just to use the combined notice and be done with it.

We are giving the exception notices to comply with the risk-based pricing. If we are doing an account review and pull a credit report on the cutomer due to receiving a bankruptcy notice do will need to send the notice to the customer since they did not apply for credit with us?

Our loan mod dept is using the customer's credit report to determine pricing, term, LTV, etc. for potential loan modifications, which makes me think that we me have to start sending out the RBPNs to these customers.

What about anyone else, do you all send them out for your mods?

Isn't that what form H-2 is for?

I personally think modifications are an open question. It certainly could be argued that a modification is the functional equivalent of an account "review" and should therefore get an H-2 notice IF (big if) you end up increasing the APR on the loan. The thing is, many modifications don't result in an APR increase; therefore no RBP notice is required regardless of how you interpret the reg.

The open question comes from the requirement at 222.75(a) which says the customer is entitled to no more than one RBP notice for each extension of credit except in the case of an account "review." Since a modification is not a new extension of credit and does not meet the traditional definition of account review (e.g. credit cards), it could be argued no RBP notice is required regardless whether the APR is increased.

Since there are new disclosure requirements coming down the road for modifications, etc. with the new Reg Z rules, I think the safest course is to provide an H-2 notice if you increase the APR. But I still say it could be argued either way.

Moving this to the FACTA forum with the rest of the threads on RPBN to save against redunduncy.

If you are using the credit score exception notices then would you still use the H-2 form for your modifications, renewals, and account review?

Wouldn't you use the H-3, H-4, or H-5 since that is what you are using for the exception?

If you have a customer who applies for credit today and you give them a credit score exception notice, and then they return in 5 months for another loan, can you give them a copy of the prior notice if you are relying on that report or do you have to pull a new notice?? We are pulling the notice through our provider when we get the credit report - wondering how everyone else is handling this...

See W.O.W.'s post above, for one. Oops....maybe the wrong thread; guess i was referring to another post.

The bottom line is: you don't have a permissible use in reality to "re-use" a credit report. Yes, you owe another notice if you use a credit report, no, you shouldn't re-use the old credit report.

Not if you aren't doing anything to the loan and increasing the rate.

I would think that for mods the H-3 notice would be given. "...for a loan secured by 1-4 units of real property". I guess I always thought of the H-2 as more of an unsecured credit review. But I read the reg again and did not see that limit. I guess I see a mod as more of a "new" loan and not just a "review".

Just received this today. Thi swould have been nice about a month ago.

The Federal Reserve System invites you to join a webcast on Risk Based Pricing Notices.?xa0; This “Outlook Live” Webinar will take place February 16, 2011 from 11:00am – 12:00pm Pacific time (2:00pm – 3:00pm Eastern). ?xa0;This webinar is part of an ongoing series focused specifically on consumer compliance issues.?xa0; To register for the FREE webinar, please visit the Outlook Live website at http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/outlook-live/
The mandatory compliance date for the risk-based pricing notice requirements was January 1, 2011.?xa0; The rules generally require creditors to provide a notice to consumers when, based in whole or part on information in a consumer report, the creditor grants credit to the consumer on material terms that are materially less favorable than the most favorable terms available from the creditor to a substantial proportion of other consumers.?xa0;
To facilitate compliance, the rules provide different methods that a creditor can use to determine when it is offering credit to a consumer on materially less favorable terms than it provides to other consumers, thus triggering a risk-based pricing (RBP) notice to the consumer.?xa0; The various methods for determining whether or not a RBP notice is required include the case-by-case method, the credit score proxy method and the tiered pricing method.?xa0; Creditors who provide RBP notices need to evaluate which method for identifying consumers receiving less favorable terms works best for their specific credit products.
As an alternative to providing RBP notices, the rules permit creditors to provide a credit score exception notice to all consumers who request credit.?xa0; Creditors may provide these credit score exception notices in lieu of RBP notices.?xa0; These notices provide consumers with a free credit score and information about their score. ?xa0;If a creditor is unable to obtain a score for a particular consumer, the creditor may provide a notice stating that a credit score was unavailable, which may indicate a lack of credit history.?xa0;
The RBP notices and credit score exception notices are intended to educate consumers about the connection between the quality of their credit data and the resulting credit costs.?xa0; Consumers who receive a RBP notice are able to obtain a free credit report to review the accuracy of their report, in addition to their free annual reports.?xa0;?xa0;
Please join us as Senior Attorney Mandie Aubrey from the Board of Governors and Supervisory Examiner Rebecca Reagan from the Federal Reserve Bank of Richmond discuss the new regulatory requirements for the RBP notice requirements.

We are doing the credit score exception notice, if we hav a co-signer, do we have to give the notice to the co-signer? I don't think we do but don't trust my brain right now.

Kinda late now, isn't it..what I want to know tho, DD...is why I haven't gotten my email on that...hummm.

Oh wait..it's in my inbox.

No to having to give them to co-signers. See page 2731 of the Federal Register version of the RBP regs.

Creditors may provide these credit score exception notices in lieu of RBP notices

This sentence confuses me. If you are giving the exception notice are you essentially saying "we risk base price - but instead of doing all the risk base pricing stuff - we give you this exception notice." or are you saying " we don't risk base price - but we are giving you this document called an exception notice to RBP - even though we don't RBP?".

If you don't have risk based pricing, this regulatory requirement does not apply to your bank and no notices are necessary.

Thank you for clarifying that.