So are the new adverse action requirements going into effect in July? The ones where youare required to disclose the credit score on the notice?

Yes. July 21.

I only see the proposed rule for Reg B. Did anyone come out with a final rule? I am beginniing to hate Dodd and Frank....

"beginning" to? Oh now!! C'mon!! I thought that we've all hated them from day one. Where have you been?

What section of the Dodd-Frank is this requirement under and could someone give me a summary of the requirements?

I don't look at Dodd Frank.....I only read the subsequent rule. I'm with issues1001....haven't seen the final rule.

From the proposed rule:

Section 1100F of the Dodd-Frank Act amends section 615(a) of the FCRA to require creditors to disclose on FCRA adverse action notices a credit score used in taking any adverse action and information relating to that score. The effective date of these
amendments is July 21, 2011.

I avoided the rush and started hating DFA from the very outset!

Proposed, Final, Interim, Interim-Final, Rule in waiting, rule we thought but didn't write down, Rule we considered once but didn't think anyone would like it but we enforce anyways, Rule we passed but then didn't explain...

At the end of the day if you don't comply and your regulator thought you should have you will still end up on Double Secret Probation!

Cheers!

Does the credit score disclosure also apply to the adverse action notices we give for deposit customers when we use their credit report as a reason to deny opening a deposit account???

Is there any kind of guidance of what is truly expected with this new rule regarding the credit score disclosure??? I can't find anything.

I posted a similar question last week, had tons of views but no opinions. What about a bank -- such as mine -- that DOES NOT practice risk-based pricing? Will the credit score have to appear on the adverse action notice in my case?

I checked with a few compliance professionals and they indicated that, although this is simply a proposal at this time, it will pass and yes, in my institution's case, it must appear on the AA notice -- even though we don't practice risk-based pricing.

It's no fun being a banker anymore...

So we give the credit score exception notice. How does this affect us? We already make the customer aware of their score from this notice. I haven't read through the entire proposed rule--I am working on it though. My biggest complaint with Dodd-Frank is this stuff just pops up left and right with very little insight or warning. That's just one complaint though.

And like Banquera, I posted a related question regarding a bank that has risk based pricing but doesn't base it's credit decision on the credit score itself, but rather the underlying credit issues noted in the report. I suppose the million dollar question is whether or not the bank is considered to be "using" the the credit score in its decision in such an instance, and therefore must include the score disclosure in its AA notices. See my post from yesterday, below:

Let's say a bank routinely orders credit reports in connection with applications for credit, which contain the applicant's credit score.

Additionally:

1) The bank issues an alternate score disclosure whenever the product the applicant is applying for uses risk-based pricing;

AND

2) In all situations, if the application is declined due to credit, it is declined based on the underlying credit issues noted in the credit report (e.g. poor payment history, judgement, bankruptcy, etc.) and NEVER on the credit score itself.

That being said, would the above bank have to start including the new proposed score disclosure in its AA notices come 7/21 if its policy is to never decline a loan based on the credit score, per se?

I have the same question as Live 2 Comply. If we give everyone who applies for consumer credit the "Credit Score Disclosure" (rather than a risk-based pricing notice only when applicable), do we have to give them the same information AGAIN with an adverse action notice? It just doesn't make any sense.

The question also keeps coming up regarding whether the credit score information would be required on a deposit account adverse action notice where a credit score was otained. I'm thinking not because its not related to an "extension of credit," which is what triggers the risk-based pricing notice rules ... although I wasn't able to find anything clarifying this in the proposed rules.

As I understand it, the new FCRA AA score disclosure rules extend beyond credit and may be applicable to Adverse Action tied to deposit accounts, employment, insurance applications etc. if the credit score was "used" in the decision.

Again, many of us obtain the score when a credit report is run but are we "using" it just because we got it?

I'm in the camp that's waiting on a final rule to be published. It'll probably be a one liner in the Federal Register that the rule is now official as proposed...

From the section by section analysis in the Federal Register:

"In some cases, a person who is
required to provide an adverse action
notice under the FCRA may use a
consumer report, but not a credit score,
in taking the adverse action. Under
section 1100F of the Dodd-Frank Act, a
person is not required to disclose a
credit score and related information if a
credit score is not used in taking the
adverse action. Therefore, the
amendments to Forms C–1 through
C–5 are only applicable if a credit score
is used in taking an adverse action. A
person may amend, at its option, Form
C–3 to add the additional headings and
remove the reference to a credit scoring
system, even if the person does not add
the heading and information about the
consumer’s credit score."

If you have the score in file but it is not a factor in your decision, the bank must decide for itself if it will treat the score as used or not used. It can be difficult to make the case that the score was not a factor when it is right there in the credit file.

Okay so let me ponder on this: they spent a considerable amount of time revising the Notice of Action Taken and the Risk Based Pricing Form for this Dodd-Frank tweak on the FCRA. When in reality all they technically could have done was change or add wording in which said "Even if following the risk-based pricing disclosure requirements, when having to give an Adverse Action give the credit score exception notice to make the customer aware of their credit standings". Talk about a complete and useless waste of our time in lieu of a much simplier solution. Oh wait, this is the Dodd Frank Financial Reform, what was I thinking? I love how they add the Paper Reduction Act section to waste more paper. Seriously?!?

Now we here that we should plan to implement even though a Final rule might not occur. In fact it's probably past their cut off date to get it published with the 21 July effective date. Caught with their pants down. Rulemaking is intended to offer the public the right to comment on proposed administrative law (CFRs). They can't implement this change without a Final rule addressing all the comments from the NPRM. But you know we'll all be complying anyway. It's evidence of sloppy Federal Agency administration. They could have issued a "Direct Final rule" instead of the NPRM. That's proper when time is short. It still allows for comments but issues the proposed effective date in the orig. doc.

What are the chances or is it possible that the final rule will be effective 7-21-11 but with a mandatory compliance date of 3, 6 or more months from that date?

Just returned from ABA Compliance Conference. The Federal Reserve said the following:

1.Goes into effect on 7/21/2011 regardless of whether there are final rules as this is part of Dodd Frank and there is no choice about implementation date.

2.The Federal Reserve is going to "try" to get final rules out before July 21.

On deposit accounts, if you use a system that provides a score based on the credit score - do you have to disclose that score on the AAN? What if you have procedures that say you don't use the score?

I agree with Banquera, it isn't any fun being a banker anymore, especially the compliance person!
I have enough trouble keeping track, implementing all the new regs, procedures and then we need to train, write new policies, etc. Then they make all the changes effective the same date!

Our pay sure doesn't increase with all the new issues, responsibilities we have.

Sorry, needed to vent!