After attending a telephone seminar about this yesterday, I'm now REALLY confused about the negative notices! I thought we had it covered in that we have placed the sample language on past due notices but it was my understanding from the seminar that each borrower has to "individually" receive a notice, even if it's husband and wife living at the same address. It was suggested that you could provide the notice one time to you current customer base by adding it to your privacy notice or mailing and going forward we would give the pre-neg. notice after closing the loan. Of course, we will still keep the notice on the past due notice. Anyway, that's what I was preparing to do until I read today that you are not required to give by one notice per household (i.e borrower&co-borrower at same address), which now has me very confused. Could someone explain to me which is correct and share with me your thoughts of adding it to our privacy notice or including in on a separate attachment when we mail the privacy notices out? We are preparing the privacy notices right now for mailing. Thanks/

The way I see it...if you have a joint account...each name is in the address line...therefore if you send out a past-due notice, it is, technically, being sent to each party. I'll argue over that one if need be. We are only sending out on past-due notices, collection letters and overdraft notices.

Thanks, Joker. That's how I see it too!

It's my understanding that our system does generate notices to co-borrowers at different addresses, so we should be fine there. We do also plan to give out the pre-notice at closing (separate doc.). I don't want to send out with the privacy notice either. Our customers get confused enough with it without adding additional information. I just want to be comfortable that we are doing all that is required under the law.

I hadn't thought about including the model language on overdraft notices or collection letters. Are others doing this as well?

monicamm,
That is exactly what we are doing. We also added it to our Privacy notice.
BC

Joker - I agree with your philosophy - however remember the FACT Act amends the FCRA and a FCRA notice is required for each person - a jointly addressed FCRA notice does not meet the FCRA requirements. Today I sent an email to my examiners (FDIC) asking their take - when I get a reply I'll share it.

We have included the statement on our past due notices and letters. But beginning 12/1/04 we will be giving the notice (as a separate disclosure) to each person becoming obligated on the loan. Here's the disclosure I put together - it may be overkill but it's what we'll use:


Fair and Accurate Credit Transactions Act of 2003
(FACT Act)

Section 217 of the FACT Act amends the Fair Credit Reporting Act, FCRA, to provide that if any financial institution (1) extends credit and regularly and in the ordinary course of business furnishes information to a nationwide consumer reporting agency, and (2) furnishes negative information to such an agency regarding credit extended to a customer, the institution must provide a clear and conspicuous notice about furnishing negative information, in writing, to the customer.

In accordance with Section 217 of the FACT Act, the following disclosure is being furnished to you.


We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. (This section was set in 18 point bold font to make it conspicuous.)


By signing below, you hereby acknowledge receipt of this disclosure on

____________________.



_____________________________________
Signature


_____________________________________
Printed Name

We added it to the Insurance Disclosure (more room).

We are modifying our system to include past due notices to other parties (e.g. guarantors) who may have never seen any of the notices that we typically send. Any suggestions for text indicating to the primary account holder that others would receive the past due notice and vice versa to the "non-primary" account holders.