The Facts on FACT (2004)
© Copyright 2004.
The Federal Reserve Board and the Federal Trade Commission are writing guidance for lenders to comply with joint final rules issued February 4. This new credit law, the Fair and Accurate Credit Transactions Act of 2003, makes permanent previous, familiar amendments to the Fair Credit Reporting Act, such as the form and content of certain disclosures, the duties of a person to take adverse action, contents of consumer reports, and more.
However, FACT also adds new consumer protections, such as notice to consumers if they are granted credit on “less favorable” terms, opt-out opportunity, disclosure of credit scores to applicants and reporting of negative information on a person’s file.
Starting on Dec. 1, 2004, lenders must have all systems updated to provide free credit scores to borrowers as well as risk-based pricing notices to those borrowers who don’t qualify for the most favorable loan terms. The more routine provisions of the FACT law came on line on March 31, 2004.
Deciphering hundreds of pages of the Act’s final ruling can be daunting, and expensive, and may take away the precious time your company has to become compliant. This new report allows you to easily sort through the Act, in a section-by-section format, to get a better grasp on the provisions that affect you the most.
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Risk-based pricing notices (many details and exceptions you need to know about, including the trigger)
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Free credit report disclosures
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Affiliate sharing (the opt-out will require lenders to restructure business formats)
breaks down the 8 titles in the Act: I: Identity Theft Prevention and Credit History Restoration; II: Improvements in Use of and Consumer Access to Credit Information; III: Enhancing Accuracy of Consumer Report Information; IV: Limiting the Use and Sharing of Medical Information in the Financial System; V: Financial Literacy and Educational Improvement; VI: Protecting Employee Misconduct Investigations; VII: Relation to State Law; VIII: Miscellaneous.
Lenders, you need to comply and this report will help you understand what’s involved.
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