FCRA

Question 1

What is the purpose of the Fair Credit Reporting Act (FCRA)?

Answer 1

to regulate the consumer credit reporting and related industries to ensure that consumer information is reported in an accurate, timely, and complete manner; to give individuals information with consumer reports are used to evaluate credit obligations; and to protect the confidentiality of information.

Question 2

Along with credit, the FCRA deals with:

Answer 2

deposit accounts, insurance, employment, and child support

Question 3

T or F

A report containing information only on the transactions or experiences between the consumer and the person making the report is a consumer report under the FCRA.

Answer 3

FALSE

Question 4

A bank can communicate other information (outside of transactions or experiences) with affiliates so long as:

Answer 4

it is clearly and conspicuously disclosed to the consumer that the information may be shared by affiliates and the consumer is given the opportunity to opt out before the time the information is shared

Question 5

What is a consumer reporting agency (CRA)?

Answer 5

anyone who regularly engages in assembling or evaluating consumer credit or other information to furnish consumer reports to third parties

Question 6

A CRA may report negative credit information for no longer than ____ years and bankruptcies for no longer than _____ years unless ________________.

Answer 6

*7

*10

* the information is related to credit or insurance for $150,000 or more

Question 7

A CRA may furnish a consumer report for what 7 permissible purposes?

Answer 7

* authorized in writing by the consumer

* in response to a court order having jurisdiction or a subpoena issued by a federal grand jury

* to review or collect on an account

* in connection with a credit or insurance transaction

* for employment purposes

* to a person with a legitimate business need for the information

* to a financial institution for prescreened offers of credit

Question 8

Users of consumer reports must give an oral, written, or electronic disclosure to a consumer when information from a consumer reporting agency contributes in whole or in part to _____________.

Answer 8

take an adverse action against the consumer

Question 9

The FCRA adverse action must inform the consumer of what CRA was used and:

Answer 9

* state that the CRA did not make the decision nor can it speak specifically to the reason for the adverse action

* inform the consumer of the right to obtain a free copy of the report within 60 days

* inform the consumer of the right to dispute the accuracy or completeness of the information contained in the report

Question 10

Users of consumer reports that receive a notice of address discrepancy from a CRA must inform the user that a consumer address supplied by the user intis request for a report is _______________.

Answer 10

substantially different from one in the consumer’s file at the CRA

Question 11

When a user receives notice of address discrepancy from a CRA, a user must have __________________.

Answer 11

reasonable policies and procedures to ensure that it furnishes a consumer address to the CRA that the user has confirmed is accurate

Question 12

A user can confirm that the consumer address provided to CRA is accurate by verifying the address with:

Answer 12

* the consumer

* its own records

* a third party

* other reasonable means

Question 13

Institutions must perform risk assessment to determine whether they offer or maintain covered accounts regarding the detection and prevention of identity theft. They must consider:

Answer 13

* the methods they use to open accounts

* the methods they provide to access accounts

* their previous experience with identity theft

Question 14

Institutions must establish and periodically update an identity theft prevention program designed to:

Answer 14

detect, prevent, and mitigate identity theft in connection with any existing covered account or the opening of a covered account

Question 15

Issuers of debit and credit cards must implement reasonable policies and procedures to assess the validity of changes of address if they:

Answer 15

* receive a change of address for a consumer’s card AND

* within a short period of time (during at least the first 30 days after receiving the notice) the issuer receive a request for a replacement or additional card

Question 16

Anyone who uses a credit report in connection with an application for consumer purposes credit and who grants credit on terms that are materially less favorable than the most favorable terms offered to consumer by that person must provide notices to a consumer when the terms on the credit products are:

Answer 16

materially less favorable (when directly compared) than terms offered on the same product or other consumers

Question 17

For risk based pricing, materially less favorable means:

Answer 17

that, with the respect to the same lender, the material terms granted to one consumer differ from the material terms granted to another consumer such that the cost of credit to the first consumer would be significantly greater than the cost of credit to another consumer

Question 18

An institution may not use eligibility information about a consumer, obtained from an affiliate to solicit the consumer for marketing purposes unless:

Answer 18

* the consumer is notified in writing that the bank may use the information received from an affiliate for marketing purposes

* the consumer is given a reasonable opportunity and simple method to opt out of the solicitation

* the consumer has not opted out

Question 19

The notice regarding use of eligibility information about a consumer, obtained from an affiliate to solicit the consumer for marketing purposes must be provided by an affiliate that has or has had a ______________.

Answer 19

preexisting relationship with the consumer

Question 20

A consumer’s opt out must be effective for ______ beginning at the time ______________.

Answer 20

*5 years

* the consumer notice is received

Question 21

A person who accepts debit or credit cards may print no more than __________________ on any paper receipt provided to the consumer at the time of the transaction and no more than ____________ for electronic terminals.

Answer 21

* the last 5 digits

* 4 digits or letters

Question 22

Financial institutions that ______________ must provide to the consumer a notice that it has furnished negative information to the CRA and the notice must be provided _________________.

Answer 22

* extend credit regularly and furnish information to CRA’s

* either before or not less than 30 days after furnishing negative information

Question 23

Furnishers of information relating to consumers to one ore more CRA for inclusion in a credit report must establish and implement written policies and procedures regarding:

Answer 23

the accuracy and integrity of information related to consumers that it furnishes to CRAs

Question 24

The record retention requirements for records of recipients of reports obtained for employment purposes must be retained for __________.

Answer 24

two years

Question 25

The record retention requirements for records of recipients of reports obtained for purposes other than employment must be retained for __________.

Answer 25

six months

Question 26

Any officer or employee of a CRA who willfully provides information on a consumer to an unauthorized person can be fined up to ________ and/or imprisoned for up to _________.

Answer 26

* $5000

* two years

Question 27

A person who obtains consumer reports under false pretenses can be liable for:

Answer 27

* actual damages or $1,000 whichever is greater

* fined and/or imprisoned for up to 2 years

Question 28

Institutions must provide consumers with a negative information notice _________ after furnishing the information to the CRA.

Answer 28

* no later than 30 days

(can be provided before furnishing the negative information)

Question 29

In order to provide a ‘prescreened’ offer, you must provide a ___________ to all names on requested list.

Answer 29

firm offer of credit

Question 30

The long form notice regarding ‘prescreened’ offers requires that text be no smaller than _______ or _______.

Answer 30

* principal text on page

* 8 point font

Question 31

The long form notice regarding ‘prescreened’ offers requires that the notice be contained __________.

Answer 31

within the body of the solicitation itself

Question 32

What information must be given to the consumer in order to prevent the bank from becoming a consumer reporting agency when banks purchase dealer paper from auto dealers?

Answer 32

Dealer reports to the consumer the name and address of the bank.

Question 33

T or F

The affiliate marketing rules allow the bank to obtain selection information from an affiliate to send marketing materials to its own customers who might be eligible for the products sold by the affiliate without requiring a notice and opt out by the bank’s own customers.

Answer 33

TRUE

Question 34

T or F

When an affiliate obtains individualized information on the bank’s customers and selects them to receive marketing materials, then the opt-out notice requirement is triggered.

Answer 34

TRUE

Question 35

When a bank denies an application for a loan and sends out an adverse action notice, what should the bank do under the Fair Credit Reporting Act?

Answer 35

Notify the consumer that a credit report was obtained and give them the name and address of the credit bureau.

Question 36

A furnisher can consider a dispute to be a frivolous dispute if it does not include ________ or it is submitted by or on a form by a ________.

Answer 36

* sufficient identifying information

* credit repair company

Question 37

What is the first step in developing an identity theft prevention program?

Answer 37

The first step in developing an identity theft prevention program is to perform a risk assessment to determine whether the bank offers or maintains covered accounts, consider the methods used to open and provide access to accounts in order to assess the bank’s exposure to identity theft threats.