Riatchjay,
I asked our retail group and they told me it was standard information and cannot be removed.

Hmm...that's odd. Like i said, i looked at one and didn't see it on there at all.

Confused. Does the name and address of the creditor or the Cr Bureau go on the closing of the new credit score language. The Cr Bureau is already provided in the 1st part of the disclosure in the Reg B A/A language. So, I thought the creditor would be listed on the closing of the FCRA Cr Score language regarding who to contact regarding the notice. After re-reading, I am not sure.

Are you talking about the optional information you can add if you choose to? I believe if you choose to add that you will be repeating the credit bureau information.

:Stupid comment alert: just needing assurance: So, this does not apply to small business or commercial loans? (Signers, co-signers, guarentors?)

IMHO, if the individual is an applicant (not a co-signer or guarantor) the ANN disclosures would apply under Section 615(a).

I am returning to compliance after a year in audit and will fess up that I am not up to speed on this change. I have 2 questions:
1) When we have to disclose "up to four factors" for the credit score, are most folks going to use the same factors as they use for the exception notice?
2) Does anyone have a model AAN form they would be willing to share? The one we came up with is on one page, but really does not provide enough room to list the factors.

When we pull a consumer report, the factors are stated on the report. We are going to disclose those factors on the AAN as well.

Does your processing software provide AAN?

Yes, it does, but there are time when we have to prepare manual forms rather than use the system generated form. Our vendor has not yet provided us with their new form.

Going back to this. Are we all in agreement on the date?

Since we only have to provide the credit score information on the AAN when we use the credit score information to determine adverse action(I think that's right...), is it ok to provide the credit score information if we used "anything" on the credit report to make our Adverse Action discision? (ex, collections, Bankruptcies, etc). Or is that outside of the goal of the model forms and the Reg?

Or have I misunderstood and we are already required to provide the credit score information if "anything" on the credit report was used in making our decision?

Thanks for helping claify this debate for us!

I've been down the same trail as you and the conclusions i've come to (until convinced otherwise) are that if we deny for a credit-based reason (since we aren't going to deny based on a credit score number anyway), then we are going to supply the credit score disclosure information, since we would have "used" the credit score (by way of those factors that you mention influencing the credit score and also influencing our decision to deny) and since those things factor into the credit score, they would also be a "factor" in the adverse action. If any of that makes sense.

Raitchjay - as a follow up to the qualifile score. I contacted the vendor myself and found out that this score can be surpressed. Which is what I imagine your institution must be doing if the qualifile score is not on the report. We are now headed in the same direction to suppress this number since it is not something we use in making our decision to open an account.

Thanks Reg....i was wondering about that.

But what about this...

The customer has a perfectly acceptable score. We would gladly do the loan. But after figuring their D/I ratio using the active trades from the credit bureau, we find that they have excessive obligations in relation to income and therefore turn down the application.

Typically, we disclose that "Our credit decision was based in whole or in part on information obtained from your credit bureau" (truncated version). We do that because we obtained their current obligations from their credit report. Would we still disclose the credit score? It really didn't play a factor but is still on the report.

Thanks,
Mike

Okay - trying to summarize the key points that are most likely to come up. Obviously I included our specific procesure for forms and that may vary based on the lender's procedures. Can a Guru comment if this is on the right track?

1) If an application is from a single individual, and we decline for a credit related reason, we will use the new C-1 version with the required credit score and factor information within the Adverse Action Notice. We previously (at time of application) also would have sent them a RBP Notice version H-3 (Safe Harbor version) which does not have any new changes.

2) If an application is from a single individual and we decline for a NON credit related reason (i.e. condo is non-warrantable), we will send them an Adverse Action Notice without any new credit score nor factor information. We previously (at time of application) also would have sent them a RBP Notice version H-3 (Safe Harbor version) which does not have any new changes.

3) If an application is from a two joint applicants, and we decline for a credit related reason, we will use the new C-1 version with the required credit score and factor information within the Adverse Action Notice. We will send each applicant a C-1 notice with their individual score, but with the denial reasons. We previously (at time of application) also would have sent each of them individually a RBP Notice version H-3 (Safe Harbor version) which does not have any new changes.

Your feedback is appreciated.

Regards,

I am also looking for clarification on joint applicants - one with good credit and the other with credit that is the reason for the AA. Am I reading everyone's opinion correctly that only the applicant with credit that was the reason for the denial will receive the credit score and factor information. The other applicant (with good credit) will not?

Yes, that is the way I understood it to read.

We do this as well...Do we disclose the credit score when we only look at the trade lines to calculate the DTI since it is on the credit report? I don't think we have to, just want to be sure.

What if you run a credit report but they don't have any history and it gives you a score of 9002. What should be put on the AAN? If we put the score 9002, the customer will not understand what that means. Could actually think that is really high!! My factors on one I ran shows "not enough tradelines". I also think that will be confusing to the applicant.

From the discussion in the FRB guidance:

Disclosure that no credit score is available.

In some cases, a creditor may try to obtain a credit score for an applicant, but the applicant may have insufficient credit history for the consumer reporting agency to generate a credit score. One commenter asked that the creditor have the option to provide the applicant notice that no credit score was available from a consumer reporting agency in the space available for the credit information disclosure.

Section 1100F only applies when a creditor uses a credit score in taking adverse action. The creditor cannot disclose credit score information if an applicant has no credit score. Nothing in section 1100F of the Dodd-Frank Act prevents a creditor, however, from providing the applicant notice that no credit score was available from a consumer reporting agency, although section 1100F does not require such notice.

Picking up on this question - so what notice will we be providing to the good applicant now?

Old School Banker
I agree with each of your scenarios...for what it is worth!
Any gurus want to confirm OSB thoughts?