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#2259843 - 09/17/21 04:05 PM Risk Based Pricing
terpsfan Offline
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Joined: Feb 2007
Posts: 1,912
Having different minimum credit scores for different loan terms would not constitute risk based pricing under FCRA correct? For example allowing auto loans to be up to 7 years for credit scores higher than a certain level would not be risk based pricing if the rate would be the same correct?

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#2259845 - 09/17/21 04:16 PM Re: Risk Based Pricing terpsfan
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,216
Galveston, TX
1022.70(a)(1)(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.

1022.71(o) Materially less favorable means, when applied to material terms, that the terms granted, extended, or otherwise provided to a consumer differ from the terms granted, extended, or otherwise provided to another consumer from or through the same person such that the cost of credit to the first consumer would be significantly greater than the cost of credit granted, extended, or otherwise provided to the other consumer. For purposes of this definition, factors relevant to determining the significance of a difference in cost include the type of credit product, the term of the credit extension, if any, and the extent of the difference between the material terms granted, extended, or otherwise provided to the two consumers.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2259880 - 09/17/21 09:26 PM Re: Risk Based Pricing terpsfan
terpsfan Offline
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Joined: Feb 2007
Posts: 1,912
I thought it was if the APR was less favorable as they define material terms for closed end to be the APR.


(n) Material terms means:

(2) In the case of closed-end credit, the annual percentage rate required to be disclosed under 12 CFR 1026.17(c) and 1026.18(e);

I assumed the reference you made was that loan term is factor in determining whether the APR was less favorable or not.
Last edited by terpsfan; 09/17/21 09:29 PM.
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#2259882 - 09/17/21 10:04 PM Re: Risk Based Pricing terpsfan
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,216
Galveston, TX
A longer term results in a lower APR.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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