Timing requirement on the Notice of Negative Information

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Question:

We have been providing the Notice of Negative Information at loan closing; however, I was told by an auditor that it is required to be provided on the notice we send when the borrower has defaulted. Is this accurate?

Answer:

You have to look to the law to find the timing requirements of the Notice of Negative Information; they may be found in section 623 of the FCRA. In general, the notice shall be provided to the customer prior to, or no later than 30 days after, furnishing negative information to a consumer reporting agency. If the notice is provided to the customer prior to furnishing the negative information to a consumer reporting agency, it may not be included in the initial disclosures provided under section 127(a) of the Truth in Lending Act [Early TIL]. The notice may also be included on or with any notice of default, any billing statement, or any other materials provided to the customer as long as it is clear and conspicuous.

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