We have chosen to use the credit score disclosure exception under the Risk Based Pricing guidelines. We have a consumer apply for a loan, but credit was not pulled, is it necessary to send a notice? If so, is there a model form?

No.

Thanks.

Along the same lines, if we pull a credit report and there is no score and we send an Adverse Action notice the section on the range and key factors would be blank correct or in our case that section is just left off the notice? Is this ok?

Also, we are doing the H3, H4 and H5 exception risk based pricing notices- when sending a adverse action are we required to include the RBP notices with the adverse action. This is something we have been doing.

Did you get an answer to this question? It seems that you would need both an AAN and RBP notice to be compliant.

Exception notices are not required if you deny the loan. If you already sent them out..fine. Your NTHLA would be required in any event.

If you deny, your new model score disclosures take care of score disclosure requirements.

So, are the old FACT Act notices obsolete? We are providing the exception notice, so all applicants are receiving this when credit is pulled. However, if a loan closes, we are still providing the existing FACT Act notice in the closing packet, noting key factors, their score, and the fact that we will report to the credit bureaus. Is this still required?

If you mean the piece that used to go with the NTHLA..no, the exception notices model that contains the NTHLA replaced that.

Negative info, if you give it up front, still applies.

RR-That is what I am referring to. Our document is titled, "Fact Act Notice" and actually only gives the Negative info notice and NTHLA info, contrary to what I posted before. So, we still need to provide neg info notice to on the loans that close, since the exception notices do not state this. Does your neg info notice consist on its own form?

Most people have put that notice on thier past due notices and then you don't have to worry about it.

Mortgage loans:
We provide the credit score disclosure at application after we pull the credit report.
If we deny the application due to appraised value, type of collateral, insufficenet cash down, etc. we give the "old school" AAN.

If we deny the application due to delinquent past or present credit obligations, garnishment, excessive obligations in relation to income, (things we found on the credit report)......I think we need to give the AAN that contains the6 disclosures - credit score, range of scores, date created, key factors, etc.

Lending VP says we only give that information on the AAN if the CREDIT SCORE is the reason we denied. The other items found on the credit report aren't reason to use the new AAN form.

I can't find this in the regulation. Any guidance is appreciated.

Thank you

RiverGirl: When the changes to Reg B were issued in July, the regulators addressed that issue in their section-by-section analysis that preceded the reg changes. On page 41592 of their Final Rule they said:

"Section 1100F of the Dodd-Frank Act requires disclosure if a credit score was used in taking adverse action. A creditor that obtains a credit score and takes adverse action is required to disclose that score, unless the credit score played no role in the adverse action determination. 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."

So it is not quite as simple as saying that it is only given if the credit score is "the reason" for denial. The score must have been no factor at all. The problem is, how do you show that it was no factor if credit report issues that probably affected the score were the reason for denial?

Thank you so much. That helps.
Another question...if we start placing the credit score and key reasons and date pulled, etc on the AANs.....is it alright to place that information on each AAN...even the ones where we are sending out becuase the consumer didn't want to proceed with the loan or similar situations?

We would have to mark the box "Our credit decision was based in whoel or part on info obtained in a report from the consumer reporting agency listed below...." That is the only way our system is set to pull the data out of the credit report into the AAN.

I would like to have it be consistent one way or another if at all possible.

You cannot have a cookie-cutter approach to this new requirement. Some AANs will require the score, others will not (and will be a technical violation if it is there). As to your comment "even the ones where we are sending out because the consumer didn't want to proceed with the loan or similar situations", that sounds like a withdrawn or approved but not accepted application that wouldn't need an AAN anyway.

I have a question regarding exceptions to supplying either the RBPN or the CSDEN.

For pre-screened loan offers (credit card and/or loans) the notices are not required, correct? Specifically if the consumer comes in to take advantage of the offer and the rate offered does not change after performing the hard hit on the consumers CR. BUT, if after pulling their credit and the score comes back lower which changes the rate, then the notice would be required.

Just confirmation needed. Thanks for your help - whoever responds:-)!