Virtually every lender (including ALL residential lenders served by CTI) utilize the exception method in complying with the Notice to Home Loan Applicant and Risk Based Pricing Disclosure requirements. This mandates the use of the H3 form which combines and satisfies both requirements. Unlike the other methods, it includes further restrictions on the construct and delivery of the disclosure and prohibits the inclusion of any other content
Credit Score Disclosure Exception
You can satisfy the requirements of the Risk-Based Pricing Rule by giving a credit score notice to every consumer, regardless of the terms on which you granted them credit. The notice must include the person’s credit score and information about credit and credit scores. Rule § 640.5(e) Unlike other risk-based pricing notices, a credit score disclosure must be in writing and separate from other information; it also must be clear and conspicuous. Rule § 640.5(e)(2) You must send the notice as soon as practicable after you request the credit score from a CRA. Timing is outlined above in “When Should Consumers Be Notified?” Rule § 640.5(e)(3)
“The 12 CFR 1022.74(d) notice must be:
1. clear and conspicuous;
2. provided on or with the notice required by Section 609(g) of the FCRA;
3. segregated from other information provided to the consumer, except for the notice required by Section 609(g) of the FCRA; and
4. provided to the consumer in writing and in a form that the consumer may keep.”
The Summary of Consumer Rights disclosure requirements primarily apply to cases where a Credit Reporting Agency issues a written consumer disclosure to a consumer.
“A consumer reporting agency must provide a Summary of Consumer Rights whenever it makes a written disclosure of information from a consumer’s file or a credit score to the consumer.” (https://www.gpo.gov/fdsys/pkg/FR-2018-09-18/pdf/2018-20184.pdf) There are other limited cases where a non-credit reporting agency must issue the disclosure such as when credit data is used for employment screening purposes.
Credit Technologies has updated the existing Consumer Rights Summary that is attached to the consumer disclosure from within our system to reflect the new disclosure language and comply with the requirements anytime a consumer disclosure is issued. It is not required (nor permitted) to include the rights disclosure with the Notice to home loan applicant/RBPD.
Please note – This information is provided as our interpretation of the requirements. It was not written by an attorney and does not constitute legal advice. As with all legal/compliance issues you should consult qualified legal counsel in you venue.