-- By Kari Michel
The Dodd-Frank Wall Street Reform and Consumer Protection Act (CFPB) which was signed by President Obama on July 21, 2010, have prescribed new rules for Adverse Action and Risk Based Pricing notifications. The new credit score disclosure rules will become effective July 21, 2011. The rules have NOT been finalized at this time.
With the information currently available, the new rules will impact all lenders who take adverse action against a consumer due to information in a consumer credit report.
Lenders will be required to disclose to the consumer:
· The actual numerical score used in the adverse decision (new requirement)
· The range of possible scores under the model used (new requirement)
· All key factors that adversely affected the credit score
- This legislation mandates the delivery of 5 factor codes (when applicable). The notice must include the top 4 and then a 5th when inquiries play a negative part in the score calculation (new requirement)
· The date on which the credit score was created
· The name of the entity that provided the score
If you have questions regarding the FCRA sections that are changing, you can refer to the Dodd-Frank legislation section 1100F.