Federal Regulations Flashcards
Fair Credit Reporting Act (15 USC 1681–1681d)
The Fair Credit Reporting Act protects consumer privacy and protects the public from overly intrusive information collection practices. It ensures data collected is confidential, accurate, relevant and used for a proper and specific purpose.
Applicant Challenge
Credit reporting agency must reinvestigate within 6 months, if applicant challenges accuracy.
Inaccuracies
Agency must forward to applicant inaccurate information given out within previous 2 years.
Disallowed Information
Report must not include lawsuits over 7 years old or bankruptcies more than 10 years old.
Disclosure upon Request –
Consumer reporting agencies must provide the information on file if requested.
Limited Access to Information
A consumer reporting agency may not provide a credit report to any party that lacks a permissible purpose, such as the evaluation of an application for a loan, credit, service, or employment. Permissible purposes also include several business and legal uses.
Investigation of Disputed Information
If a consumer’s file contains inaccurate information, the agency must promptly investigate the matter with the source that provided the information. If the investigation fails to resolve the dispute, a statement may be added to the credit file explaining the matter.
Correct or Delete Inaccurate Information
A consumer reporting agency must correct or, if necessary, delete from a credit file the information that is found to be inaccurate or can no longer be verified. The consumer reporting agency is not required to remove accurate data from a file unless it is outdated. Adverse information that is more than 7 years old (10 years for bankruptcies) must be removed from the file.
Fraud and False Statements (Fraudulent Insurance Act) penalties
A fine of no more than $50,000, imprisonment for up to 10 years, or both
If the violation jeopardized the safety and soundness of an insurer, and was a significant cause of the insurer being placed in conservation, rehabilitation, or liquidation by an appropriate court, imprisonment can be for up to 15 years
If the amount embezzled or misappropriated does not exceed $5,000, violators will be fined up to $50,000, imprisoned for up to 1 year, or both
If a person uses threats, force, or attempts to impede/obstruct the administration of the law during any proceeding involving the business of insurance before any insurance regulatory official, they will be fined up to $50,000, imprisoned up to 10 years, or both.
Any individual who has been convicted of a felony involving dishonesty or a breach of trust, who then willfully engages or permits an individual to engage in the business of insurance, and whose activities affect interstate commerce, will be fined up to $50,000, imprisoned up to 5 years, or both.
What does the Financial Privacy rule require?
The Financial Privacy rule requires “financial institutions,” which include insurers, to provide each consumer with a privacy notice at the time the consumer relationship is established, and annually thereafter.
Gramm-Leach-Bliley Act (the Financial Services Modernization Act of 1999)
This act repealed parts of the Glass-Steagall Act of 1933 and allowed the merger of banks, securities companies, and insurance companies. It also established the Financial Privacy Rule and Safeguards Rule for the protection of consumers’ privacy.
