Consumer Lending Regs- Fair Credit Reporting Act

Question 1

To promote the accuracy, fairness and privacy of consumer information contained in the files of consumer reporting agencies
To protect consumers from the willful and or negligent inclusion of inaccurate information in their credit reports
To regulate the collection, dissemination and use of consumer information including consumer credit information
These are what?

Answer 1

The purpose of fair credit reporting act

Question 2

What regulation is fair credit reporting act?

Answer 2

Regulation V

Question 3

Who has general rule making authority for FCRA?

Answer 3

CFPB but Ncua and ftc also have some authority

Question 4

Obtaining credit reports under false pretenses or knowingly without permission can result in a fine up to?

Answer 4

$1000.00

Question 5

What are the 3 key areas of CFPB action?

Answer 5

Fixing data accuracy at credit reporting agencies
Repairing broken dispute processes at credit reporting agencies
And cleaning up information from data furnishers

Question 6

What are permissible purposes to pull a credit report?

Answer 6

Court order or federal subpoena
Consumer written instructions
Credit transactions
Employment purposes
Underwriting insurance
Business transaction initiated by consumer
Review of existing accounts
Prescreened offers of credit

Question 7

What are the 4 common permissible purposes our credit unions might access a credit report?

Answer 7

Credit transactions
Employment purposes
Prescreened offers and
Review of existing accounts

Question 8

This is required when furnishing negative information to a credit reporting agency

Answer 8

Negative information notice

Question 9

What are the two options for negative information notice

Answer 9

Provide notice to member before furnishing information to a credit reporting agency
Or provide notice to member within 30 days after furnishing the information to credit reporting agencies

Question 10

True or false you are required to send a notice to home loan applicants when you use a credit score in connection with mortgage loan applications?

Answer 10

True

Question 11

What information must the notice go home loan applicant have on it?

Answer 11

Consumers credit score
Range of possible scores
Date consumers score was created
Key factors influencing the score

Question 12

What is Prescreening?

Answer 12

The process by which a credit reporting agency either compiles or edits a list of consumers who meet specific credit criteria and then provides that list directly to a creditor, or to 3rd party who sells the list to a creditor

Question 13

What are the pre screening rules?

Answer 13

Required to provide notice when members are offered credit based on prescreened list
Members must be able to opt out of pre screening
Must retain prescreeb criteria for 3 years
If you make a offer of credit to members who pass the pre screening process the offer does not have to be unconditional… meaning you can still require verification of income etc

Question 14

There are 2 types of opt out options what are they?

Answer 14

Short and long form

Question 15

What are the requirements for pre screen and opt out short?

Answer 15

Must be prominent, clear and conspicuous
Font must be larger than the rest of the text
Must be located on the front side of the first page of the promotional document
Must be distinct from other text in a type from principle type like inside a border

Question 16

What are the requirements for the long version of pre screen and opt out?

Answer 16

Clear and conspicuous
No smaller than principal text
Begin with the heading PRESCREEN AND OPT OUT
Type style distinct from principal such as bold underlines etc
Set apart from other text on page

Question 17

What is risk based pricing?

Answer 17

Modifying interest rate based on a credit score

Question 18

Creditor uses consumer report in connection with application or extension of credit and
Based on that report grants or extends credit to consumer on terms that are less favorable than the most favorable terms
This is an example of?

Answer 18

When you must provide risk based pricing notice

Question 19

Can you provide a risk based pricing notice to everyone?

Answer 19

Yes because it is easier

Question 20

When do you have to provide a adverse action form?

Answer 20

Denial or revocation of credit
Change in terms of existing credit arrangement
Refusal to grant credit on requested terms

Question 21

What are permissible uses for consumer reports under the FCRA?

Answer 21

Determining an applicants eligibility for credit, insurance or to open an account
In response to a court order
Prescreening a list of members for credit services
In accordance to a written request from a member

Question 22

When information obtained from a credit bureau has any bearing on a credit decision what must be disclosed to the member?

Answer 22

That info from a credit bureau was used in the credit decision
Name, address, telephone number of the credit bureau
Statement that the credit bureau did not make the decision
Notice of members right to Receive a free copy of report within 60 days
Notice of rights for member to dispute with bureau

Question 23

Under what circumstances would your credit Union become a consumer reporting agency?

Answer 23

If you report to others the information that you gathered from sources other than through your own experience with member

Question 24

What is the duty of the credit Union upon discovering that incorrect information was reported to the consumer reporting agency

Answer 24

Credit Union must provide the complete and accurate information to the credit reporting agency and notify each credit reporting agency to whom the incorrect info was given

Question 25

Under what circumstances can you obtain and use medical information

Answer 25

If the information relates to debts, expenses, income, benefits, assets, collateral or the loan purpose including the use of loan proceeds…
Example loan proceeds are being used to pay medical expenses such as a surgery

Question 26

Can you take medical conditions into account when making Credit eligibility decisions?

Answer 26

No

Question 27

Report accurate information
Update information as necessary
If disputed by member notify credit reporting agency or correct the information
If notified of dispute by credit reporting agency conduct investigation within 30 days
Report voluntary credit account closings
Report dates of delinquencies
These are examples of a credit unions______ under the fair credit reporting act

Answer 27

Obligations

Question 28

What is the initial fraud alert period for members credit reports?

Answer 28

90 days

Question 29

True or false alerts can be extended to 7 years?

Answer 29

True

Question 30

What is the active duty alert period?

Answer 30

12 months

Question 31

True or false during alert period creditors can not extend new credit unless safeguards are in place to verify the identity of the consumer by contacting the consumer by methods specified

Answer 31

True

Question 32

Reasonable policies and procedures
Staff training
Oversight of service providers
Oversight by board of directors or committee
These are required components if your credit unions_____

Answer 32

Identity theft protection program

Question 33

A written risk based program designed to detect prevent and mitigate identity theft when opening accounts or for existing accounts is called the?

Answer 33

Red flag program

Question 34

For the red flag program you have to have policies and procedures to:

Answer 34

Identify red flags/ incorporate them in program
Detect incorporated red flags
Respond to red flags to prevent and mitigate identity theft
Update the program periodically