It has been almost a year since my last Fair Credit Reporting Act (FCRA) article and I have a new FCRA issue to address that has been a big discussion topic within our compliance team. Many lenders contract with a third party to obtain a credit report from the big three; however, the preparation of the adverse action notice becomes challenging depending on what type of report is obtained.
First, let’s look at the FCRA basics. Section 615 of the act requires the lender to provide a notice of adverse action taken, and when information from a credit report was used in the decision process, the lender must provide details about the credit reporting agency (CRA). In addition, if a credit score was used in making the decision, the credit score and credit reporting agency must be disclosed.
Now that seems pretty simple: list the CRA used in making the decision. Well, not so fast.
Length: 1 pages (PDF 50 kB)