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#1629171 - 11/16/11 05:31 PM Card Denials and Risk-Based Pricing Notices
Anonymous
Unregistered

If we deny a debit/atm card based on information in a credit report are we required to disclose the RBP notice to the applicant (or is this only a requirement on loans)?

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#1629185 - 11/16/11 05:45 PM Re: Card Denials and Risk-Based Pricing Notices Anonymous
EmilyAnn Offline
Gold Star
Joined: Jul 2007
Posts: 273
You are required to provide the FCRA adverse action notice when you use a consumer report to take adverse action on deposit accounts and services. You do not have to provide a risk-based pricing notice. That notice is an FCRA/Regulation V requirement that only applies to extensions of credit.

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#1629224 - 11/16/11 06:14 PM Re: Card Denials and Risk-Based Pricing Notices EmilyAnn
Anonymous
Unregistered

Where is this specifically stated in the final rules? Thanks.

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#1629226 - 11/16/11 06:16 PM Re: Card Denials and Risk-Based Pricing Notices Anonymous
Anonymous
Unregistered

Orig. Anon. here...need to clarify my previous question. Where in the final rules does it state that the RBP notice is not required on cards?

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#1629307 - 11/16/11 07:40 PM Re: Card Denials and Risk-Based Pricing Notices Anonymous
EmilyAnn Offline
Gold Star
Joined: Jul 2007
Posts: 273
See the coverage section of the final rule:

640.1 Scope. (a) Coverage—(1) In general. This part applies to any person that both—
(i) Uses a consumer report in connection with an application for, or a grant, extension, or other provision of, credit to a consumer that is primarily for personal, family, or household purposes; and
(ii) Based in whole or in part on the consumer report, grants, extends, or otherwise provides credit to the consumer on material terms that are materially less favorable than the most favorable material terms available to a substantial proportion of consumers from or through that person.

The original question asked about debit or ATM cards, not credit cards. A debit or ATM card is not an extension of credit. If linked to an overdraft line of credit, you may have a case in which you would need to provide an Adverse Action Notice with the Reg B/ECOA information if you turned it down. I won't opine on that since I don't have details on whether such a program is in place and how it works. But you would not, for the debit or ATM card itself, provide a risk-based pricing notice, even if an overdraft line of credit is involved. Note also in the definition that the RBPN specifically applies to those instances in which credit is actually provided - NOT in adverse action situations.

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