With the credit scores and key factors now being on the AAN does that mean we do not give the RBPN exception notice? Also, with the new AAN shouldn't the loan officers name be on the form as with the old forms? I think we're putting the bank's name in a place where it should be the officer's.

The new AAN does not replace or substitute for the RBPN/Exception Notice requirement.

You only need to put the bank's contact information and it should be the information of the person or department that can address the consumer's question concerning the AAN. FWIW we put the bank's name and the loan officer's name in the contact information section.

The RBPN/Exception notice was never to be given with an AAN, right? We have done it anyway but I'm wondering if we should stop now.

Because we have the credit score on the credit report, whether it's used in the lending decision or not, we provide the Exception Notice with that information.

However, we only put the credit score information on the AAN, IF it was used in the decision to turn down the loan. If not, we tick off the reasons for denial and leave the credit score information blank.

Reasonable?

The RBPN is not required when a AAN is provided.

The exception notice is also not require when AAN is provided providing the notice is provided as soon as practical after obtaining the information. Because of this requirement it may be difficult for some FI to provide the AAN within a time frame to meet that requirement therefore they provide the exception notice as a matter of procedure.

Do the new AAN notices have to been signed?

No.

Ok, I am trying to ascertain if we need to complete the second part of our adverse action notice regarding credit score. The customer has a decent score (we only use score to price not to determine action taken). However the only thing on this customer's credit report is student loans and they have not started repayment yet. They are scheduled to start 2 months from now in which they will be a little less than 40K. The loan officer denial reasons are limited credit and "pending" excessive obligations in relation to income. Part to on our ARTA denial we selected the first box which has us disclose that our credit decision on your app. was based in whole or in part on information obatiined in a report from in which it discloses all the credit agencies we used with their contact information.
The second part of Part 2 is mentioning we also obatined your credit score from _______ and used it in making our credit decision. And then showed the score and key factors and date, etc. The loan officer feels this should not be selectd since this person did not have bad credit which would result in the denial. Yes or no? If the reasoning was for insufficient collateral I would clearly have my answer but the adverse action reasoning for this one is not as clear. Please advise. Thanks.

After giving this issue a lot of thought, we decided that if we complete the FCRA section of the AAN (the section regarding the credit report), then we will also complete the credit score section. Our credit reports contain the credit scores, and we believe it will be difficult to argue that we used the credit report, but didn't use the credit score. I've heard from some other BOL posters that they are now suppressing the credit score on their credit reports since they generally don't use the credit score anyway, and don't want to have to defend this position...

Whether or not you used the credit report and will even complete the FCRA section of the AAN is a different subject. Based on what you've said, whether you used the credit report would depend on whether the applicant disclosed the student loans on his/her application. Here is a great explanation of the issue from a post several years ago (though still applicable) by David Dickinson:

"If you pull a credit report but do not use it to deny the applicant, do NOT report the use of the credit report as you didn't use it adversely against the applicant. Bonnie [another poster] said "While the report itself may not have derogatory information, if the DEBTS reported affect the debt-to-income ratio, then the FCRA notice is still triggered." This is NOT true if the borrower reported all of these debts on their application. If the credit report only verifies what the applicant already stated, I did not use the credit report against them."

On Page 41593 of the Federal Register (Vol. 76, No. 136 dated July 15,2011), under Use of a credit score it states:
"Section 1100F of the Dodd-Frank Act requires disclosure if a credit score was used in taking adverse action. A creditor that obatins a credit score and takes adverse action is required to disclose that score, unless the credit score played no role in the adverse action dertermination. If the credit score was a factor in the adverse action decision, even if it was not a significant factor, the creditor will have used the credit score for purposes of section 1100F of the Dodd-Frank Act."

I guess this section is really what has tripped me up. On the flip side of this is the co-applicant has HORRIBLE credit with collections, etc. But they do not have a score, so you cannot disclose N/A and of course since a score has not been determined, no key factors, so we cannot fill out that section and of course the final rules address this but you have to admit they do not make logical connections on this.
The majority uses the credit score exception notice and we've been handing it out for all consumer applications even if denied. Because we cannot verify if the denial is given out at a reasonable time, we still give out this disclosure so the customer is getting double information BUT because this final rule addresses that attaching the notice to denial does not meet the requirement we are forced to overcomply (imho). Shew, I guess I could rant all day on the asinine attempts of regulatory reform to better the consumer that only causes more confusion.

I have some resources that might help you. Feel free to PM me with your email address and I can send them to you.

What are you doing on your AAN when you don't have a credit score? We pulled the credit but got "N/A" for the score but we take that into account and also the other things that might be on the report as well. Do we still list that we used a particular credit bureau and just leave the score section blank or what is the best way to do this?

We leave the entire section blank.


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.

Dan, thanks for you response. What are your thoughts in a case where no score was given on the credit report but there are accounts listed with delinquencies? Also on one with no score where the loan officer has chosen one of his denial reasons as "No credit". Are we required to disclose something in those cases?

No credit score is no credit score, regardless if accounts appear in the report.

Denying for "no credit" would be an adverse reason that would need to be disclosed under 202.9.

If there is no credit score on the credit report, do you see any problem with deleting the credit score section from the AAN rather than just leaving it blank?

For loans that are not declined for credit score, we use the old form, since the new information is not required.

If we are denying a deposit account through our online account origination process, can we mail them a copy of the notice and, if so, how many days do we have to mail this?