FAIR CREDIT REPORTING ACT

 Serves the following principal purposes:  To regulate the consumer-reporting industry.  To prohibit unfair actions from CRAs  To restrict the availability and use of consumer reports.  Applies to all types of credit PURPOSE AND SCOPE

 Consumer: An individual.  Consumer Report  Any oral, written, or other communication of information by a CRA.  Information about consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.  Usedin establishing a consumer’s eligibility for any of the purposes permitted under the FCRA.  Consumer-Reporting Agency: Assembles consumer information for the purpose of furnishing consumer reports to third parties. DEFINITIONS

 Determining a consumer’s eligibility for an account or a service  Court Orders  Prescreening  Member’s Permission PERMISSIBLE PURPOSES FOR CONSUMER REPORTS

 Required when the credit union denies or increases the cost of a member’s credit or deposit account based on third-party information.  May be combined with the ECOA notice ADVERSE ACTION NOTICE

 If Information Was From a Credit Bureau Information:  Credit bureau information was used  The name, address and telephone of the credit bureau  The credit bureau did not make the decision to take the adverse action.  Right to a free credit report  Right to dispute credit report  Credit Score Information, if applicable  If Information Was From Other Outside Sources:  The nature of information or right to request it  Source of the information (optional)  If the Information Was From the Credit Union’s Own Records:  No obligation ADVERSE ACTION NOTICE CONTENTS

 You can report your own transactions and experiences to others.  Do not report information received from third parties to others. Don’t Become a CRA!

 Provide when you report negative information about a debtor to a CRA.  Provide before or after reporting information.  Use Model notices!  Variety of delivery methods available. NEGATIVE REPORT NOTICE

 Required if you use or obtain credit scores in connection with a mortgage loan.  Contents:  The “Notice to Home Loan Applicants”  The credit score(s) used in connection with the application  Key factors that make up the credit score(s)  Provide as soon as “reasonably practical.”  Required whether or not the loan is approved.  Use the model notice! NOTICE TO HOME LOAN APPLICANTS

Required when:  A credit report is used  A consumer’s loan terms are “materially less favorable” RISK BASED PRICING NOTICE

 Applies to consumer credit only.  Use Model Forms!  There are various methods to determine who gets a notice.  Various Exceptions Apply. RISK BASED PRICING NOTICE

 Report correct information  Correct and update information  Establish policies and procedures to ensure accuracy  Investigate disputes  Report voluntary account closures  Report correct delinquency dates  Respond to ID Theft Notifications OBLIGATIONS OF FURNISHERS OF DATA

 Fraud Alerts: Initial period of 90 days, or an extended period lasting seven years.  Active Duty Alerts: during the period of active duty. FRAUD AND ACTIVE DUTY ALERTS

 Maintain procedures to form a “reasonable belief” of the true identity of a member.  Use telephone numbers if provided on the report.  Follow procedures and document results before issuing new credit or new access devices. RESPONDING TO ALERTS

 A policy and program is required  Applies to consumer accounts  Patterns, practices, or activities that indicate a possible risk of ID theft ID THEFT RED FLAGS

 Risk-based  Board approval  Board and/or senior management involvement  Training  Service provider oversight  Procedures PROGRAM REQUIREMENTS

Validate change of address requests:  Required when a change-of-address notice and a new card request are received close together  Issuer must validate address before issuing a new card SPECIAL RULES FOR CARD ISSUERS

 Credit unions must have procedures for responding to address discrepancy reports received from a CRA.  Credit unions must have procedures for providing updated addresses to a CRA. ADDRESS DISCREPANCIES

 Notice must accompany all prescreened offers:  Long Notice  Short Notice  Pre-screened Offers  A credit union must make an offer of credit to all members who pass the prescreening process.  The offer can contain certain conditions  Record retention requirements apply PRESCREENING RULES

Certain rules and prohibitions apply to the acquisition and use of medical information contained in consumer reports MEDICAL INFORMATION

 Credit unions must procedures for disposing of information contained in consumer reports.  Follow Information Security Guidelines! DISPOSAL OF RECORDS