Fair Credit Reporting Act

Question 1

CUs must have a ‘permissible purpose’ to obtain a consumer report.

What are the permissible purposes?

Question 2

What must a CU do in order to obtain and use a prescreened list?

Under what circumstances may a CU refuse to grant credit to someone on the list?

Answer 2

CU obtains a list from credit bureaus that meet predetermined creditworthiness criteria

if the member no longer meets the criteria

Question 3

When is a risk-based pricing notice required and how is it different from an adverse action notice?

What must be included in the risk base pricing notice?

Are there any exceptions to the risk-based pricing notice requirement?

Answer 3

Materially less favorable

based on a credit report
used in connection with an application to grant credit
yes there are exceptions

Question 4

What must a CU do when it receives a direct dispute from a member?

Answer 4

complete a reasonable investigation
review relevant information
complete within 30 days, can get a 15 day extension

Question 5

When is a negative information notice required?

Answer 5

any information concerning a member’s delinquencies, late payments, insolvency, or any form of default

Question 6

When is an adverse action notice required under the FCRA?

Answer 6

Same as ECOA - plus
an action taken/determination - made in connection with an application by a member
adverse to the member