Fair Credit Reporting Act Flashcards
A consumer report is what?
Written or Oral communication bearing an individual creditworthiness or reputation
Consumer reports are covered under FCRA when it is used to establish
Credit for personal reasons
Employment purposes
Any other authorized purpose
Consumer report does not include
A transaction report only
A experience report
Information between affiliates
An investigative report for a prospective employer
What must a consumer reporting agency do with obsolete information
Purge it
What is the maximum a consumer reporting agency can report negative information
7 years
What is the maximum years a consumer reporting agency can report bankruptcies
10 years unless the information is related to credit insurance for $150k or more
What are permissible purposes for furnishing a credit report
Authorization from customer in writing
Court order
Insurance transaction
Employment purposes
Legitimate business need
To obtain prescreened consumer info
If a credit report is pulled for employment purposes the employer must at first.
Disclose to the individual in writing a consumer report may be obtained
Must obtain written authorization from the consumer
The requirements for user of consumer reports are
Give an oral or written communication when consumer report information leads to
What are the four things to be considered a legitimate business need
Connection with a business transaction initiated by consumer
For use by potential investors
To determine if consumer still qualifies for terms
If the consumer is liable for a business debt
Adverse actions include denial of
Credit
Insurance
Checking account
Renewal of insurance or credit
Employment
If information from a credit report was used to make the adverse decision, the user must disclose what to the customer
The.
Name
Address
And a 800 telephone number of the credit reporting agency
When the consumer is made aware of the name, address, and consumer reporting agency that provided the report that caused the adverse action what else must be disclosed
A statement the consumer reporting agency did. It make the decision
Let the consumer know they can obtain a free copy of the credit report in 60 days
Let the consumer know they can dispute the accuracy and completeness of the report
If information form a third party is used to make the adverse decision, the user must
Notify the consumer of the action
Let consumer know they can see what he information if requested within 60 days
Creditors of consumer reports may also use information if a transaction was not initiated by the consumer if
The information is limited to name, address, and a unique credit identifier
The user let’s the consumer know information from a credit report was used in connection with the transaction
The consumer received the offer because they met the criteria
The offer can not be extended if consumer fails to meet initial criteria or does not furnish requir d collateral
Has the right to opt out of prescreened offers
If an enity made a solicitation offer how long must the file be maintained on file showing the criteria used to select the consumer
3 years after the offer is made
If an employer uses a report in whole or part to take an adverse action, the must provide the consumer with
A copy of the report
A description of the consumer rights under FCRA
Users must implement procedures to allow them at the time they receive a notice of address discrepancy to
Form a reasonable belief that the consumer making the request is the right consumer
They can verify this by
Verifying consumer information with third party or consumer
When a user receives a notice of address discrepancy they should have policies to ensure that the credit reporting agency receives
The correct address going forward
What is a covered account
Accounts that involve continuing relationships establishes for personal that permit multiple payments or transactions
Should an institution perform risk assessments to determine whether they offer or maintain covered accounts
Yes. They should take into consideration
Methods used to open account
Methods provided to access accounts
Previous experience with identity theft
Institutions with covered accounts should establish an identity theft program that can
Detect
Prevent
Mitigate
The Identity theft with opening and closing of a covered account
The program must be appropriate to the size and complexity of the bank
Elements of an identity theft program include
Identification of relevant red flags
Respond appropriately to red flags
Ensure program is updated periodically
Administration of the identity theft program includes
Approval from the board
Involve a board member in the implementation of the plan
Regularly train staff
Exercise program oversight of service providers
Card issuers must implement what
Reasonable policies to assess the validity of address changes
If a address change or card replacement request is received in less than ____ days then what type of validation should occur
Address
Any communication with the card holder regarding a address validation should be mailed how
Seperatly from regular correspondence.
A risk basked pricing notice is required when
If you used a credit report to make a decision
You grant different terms based on the strength of the consumer
What type of credit is excluded from risk based pricing
Business
When must a risked basked pricing notice be provided to the consumer
When the offered terms are less favorable than what is overed to other consumers
Some material risk basked pricing terms used to make direct comparisons of terms of credit
Apr
For a credit with no apr. fee or required deposit
Creditors can use the score proxy alternative to make direct comparisons for identitying consumers being awarded less favorable credit. Methods include
A cut off score
Ways used inDetermining the cutoff for the credit score proxy are
Sampling approach
Acquiring a portfolio - using their cut off score
Recalculating cutoff scores - every two years
Secondary source - I.e market research
Using two or more scores
No credit score available- automatically receive less favorable terms
Lenders that set material terms of credit by placing consumers within discrete pricing tiers based on the consumer credit report must provide what to all consumers who are not in the top tier or tiers
Risk based pricing notice
If 4 tiers - all except top tier would get notice
If 5 or more tiers - all except top two tiers would get notice
What must be provided when a lender uses a consumer report in a review of an existing account and increases the APR
A risk based pricing notice
What are general contents of a general risk based pricing notice
Includes information about credit history
Terms are based on credit report information
Terms may be less favorable
Consumer has right to verify accuracy
Credit reporting agency that sent the information
You have 60 days to request a copy
How to obtain a credit report
You can go to FTC site for more info
Risk based pricing notice for an account review when the rate changes should include
Consumer report includes info about your credit history
We conducted a review of you account
Your APR has been increased
You have right to verify
Who furnished the credit report
How to obtain a credit report
Risk based pricing notices should be —
Clear and conspicuous
Oral, written.’, electronic
For closed end loans, risk based pricing notices must be provided before
Consumption
For open end loans, risk based pricing notice should be provided before
First tranamsaction
For review accounts, the risk based pricing notice should be given
At the time the decision is made to raise the APR
For automobile loans the risk based pricing notice can be given
By the lender as long as they the bank makes sure the lender has a process to make sure the borrower receives it on time
For risk based pricing with multiple scores, the notice includes information on the credit score that was used to make
The decision
If risk based pricing averaged two scores, notice should include
Information on at least one of them
If multiple consumers, a risk based pricing notice should be provided to
Each
If risk based pricing notice is not required
A consumer Gets the credit that they requested on the terms they wanted
A consumer that received a adverse action
Consumer was part of a prescreened solicitation
Extension of credit for a one to four family residence
Account review notices for single family residences include
Includes info about credit report
Score takes into account credit history
Score can determine it credit is granted
For fcra purposes, the score obtained, the factors behind the score, copy of the notice of the home loan applicant
Bar graph showing distribution of scores
You can verify information
You can request a copy without charge
Go to CFPBb website for more info
Closed end account review risk based pricing notices must be
Clear and conspicuous
Provided with other FCRA notice information
Segregated from other information
Provided in writing in a form the consumer can keep
A risk based pricing notice does not have to be provided if
It is a non residential property loan
The person does not have a credit score
How many notices are required to be provided to a consumer per credit extension
1
If multiple consumers, does each one receive a risk based pricing notice
Yes, that contains only their score. Even if the consumers have the same address
If the notice does not contain the score the a single notice can be sent when addressed to the same address
Banks must properly dispose of any consumer information they maintain or other wise process in accordance with
Interagency guidelines for establishing information security standards
Credit information providers must furnish information nuthatch is
Accurate
Can a furnished report information they know is inaccurate if the consumer notified them
No
If an information provider determines that it has made an inaccurate report it must
Promptly correct and update the information
If a consumer disputes information that has been reported, the furnished must
Also include a notification that the consumer disputes the accuracy of the information
If after investigation any item on a report is found to be inaccurate, incomplete, or unverifiable the consumer reporting agency must
Promptly modify the information
Promptly notify the furnished that the information has been modified
After receiving notice of dispute from a consumer reporting agency the provider must
Conduct a complete investigation
Review all relevant information report the results of the investigation to all consumer reporting agencies
If a consumer notifies a furnisher that information its maintaining results from identity theft, and submits an identity theft report, the furnisher may not
Furnish such information to consumer reporting agency unless it knows or is informed by the consumer that the information is correct
How long can the put a fraud alert on their credit report
90 day
If the consumer specifies a telephone number on a fraud report
The user of that report must contact the consumer at number or take reasonable steps to verify the consumer identity
Consumer reporting agencies must include extended fraud alerts if the consumer provided what
Identity theft report such as a police report
If a consumer reporting agency receives an active duty alert
It must put an alert on the consumer file for 12 months
Reasonable procedures for proof of identify proof of identity for consumer reporting include
Ensure information is sufficient to allow a match
Be able readily to adjust information
For prescient notices the bank must provide
A short and a long form prescreen notice
What must the short form notice contain
Clear and conspicuous
You can opt out if you call this 1-800 number
Go see the long notice
Not less than 12 don’t
Front page of solicitation
The long prescient notice must be
Say required by FACT act
Must be in solicitation
Don’t no smaller than 8
Must say in all caps. Prescreen and opt out notice
If an institution wants to use information from an affiliate the
Consumer has to be made aware in writing
The consumer if given a chance to opt out
The consumer did not opt out
A bank is considered to have received solicitation maerketing information from an affiliate of
It used it to determine who to send the solicitation to
Uses it to establish the criteria on who to select
Decide what products or services to sell them
Opt out rules do not apply if
There is a pre existing relationship
Bank supplies employee benefits to the person
The bank is performing services on behalf of affiliate
The bank is reacting to a consumer initiated request
A consumer opt out must be effective for how long
5 Year’s from when the consumer notice is received
If joint relationships, how many opt out notices should be sent
One
Content of opt out notices include
Clear, conspicuous, and concise
Name of affiliate
Describe type of eligibility information being used
Let the consumer know they do not have to renew the notice
Can opt out notices be consolidated with other notices
Yes
Means of opting out
Check boxes
Self addressed envelope
Electronic means
To free number
After an opt out expires the consumer must receive what first before he can receive solicitations again
A renewal notice and it must be provided by the affiliate that provided the original notice
How soon should the renewal opt out notice be sent
A reasonable time before the expiration of the original opt out notice
What are the consumer credit report seven characteristics
Creditworthiness Credit standing Credit capacity Character General Reputatiin Personal Characteristics Mode of living
What is not a credit report
Transaction and experience info
Reporting credit to a third party at the consumers request
Communication to Affliates if transactions and experience, notice of sharing to opt out
Consumer Reports must include
Credit score and key factors
Account disputed by consumer
Notice of address discrepancy
Notice of Fraud alerts
Account closed by the consumer
Medical information is
Physical, mental, or behavioral health condition
The proviso of healthcare
The payment of healthcare
Consumer reports may not furnish medical information unless
Written consumer consent
The information is limited to account status
With medical information, creditors may not
Share medical information for other than what is provided
Obtain or use medical information to determine credit
Now debt can be considered like other debt. However reason for medical treatment can’t
What is permissible purpose
CRAs may release consumer reports in limited circumstances
Credit or insurance applications or account reviews
Pre screed marketing
Written consent
Court order
Employment
Due diligence
Legitimate Business Need
For prescreend offers the CRA must have
Consumer authorization
What must the prescreened offer be
A firm offer of credit and must provide an opt out method
For prescreen offers CRAs should only provide infomation to
Facilitate the creditor reaching the consumer to make the firm offer
The CRA may not identify specific relationships or experiences with other creditors
Information furnished to CRAs must be ————- and full of ——
Accurate and integrity
Accurate means the credit report must correctly
Identify the appropriate consumer
Reflect terms and liability of the account
Reflect consumer performance
Integrity of information furnished about an account should be
Substantisted by the furnisher records
Designed to minimize likelihood that information may be incorrectly reflected in a consumer report
Includes information in furnisher’s possessiin CRA determines relevant
Furnishers must have what type of policies in place
Reasonable written procedures regarding the accuracy and integrity of the information it furnishes to CRAs
Appropriate to size of furnisher activities
Incorporate guidelines
Reviewed periodically
Consumers may contact the acRA to dispute information but must
Identify the information disputed
Explain the dispute
Provide supporting documentation
CRA has how long to investigate a dispute
30 days or 45 if the consumer provides more information
For a dispute of information with consumer report the CRA has how many days to notify the furnisher
5
Exceptions to dispute within consumer reports
Identifying information
Identity of past or or present employers
Inquiries
Information related to alerts
Who provided information
Credit repair organization
