Federal Reserve and FTC Publish Final Credit Score Disclosure Rules

The Dodd-Frank Act amends the Fair Credit Reporting Act (FCRA) to require companies that use credit scores to include those scores, and related information, in adverse action and Risk-Based Pricing Notices provided to consumers. This morning, the Federal Reserve Board (FRB) and Federal Trade Commission (FTC) published final rules to implement these provisions. Highlights of the rules include: (a) no proposed changes to the “Credit Score Exception Notices” under the Risk-Based Pricing Rule—meaning that lenders may continue to use existing notices following the effective date of the new requirements; (b) new credit score disclosure language for the Regulation B sample adverse action notices which will require the disclosure of up to nine reason codes; and (c) a variety of interpretations of the FCRA, including guidance on when adverse action notices are required under the FCRA and interpretations of the definition of “credit score.” Compliance with the new adverse action notification provisions is required by July 21, 2011, and compliance with the revised Risk-Based Pricing notification provisions is required by August 15, 2011.

Section 1100F of the Dodd-Frank Act amended section 615 of the FCRA to add credit score disclosure obligations in connection with adverse action and Risk-Based Pricing Notices.