Consumer Credit Application and Decision Notices

When someone applies for credit, there are notices that the creditor must send to them. The content varies with each notice. So does the timing. These credit application notices were complicated enough before the FACT Act came along. Now the list of notices is much longer and the confusion is greater.

Each notice has a triggering event. It may be the time that the creditor obtains specific information, such as the credit score. Or it may be the time that the creditor takes certain action, such as making a credit decision.

Then each notice has specific content. Because each notice serves a specific purpose, it must contain specific information related to that purpose.

Both timing and content - to say nothing of remembering the notice in the first place - are grounds for violations. With all the different requirements, this gets confusing. Notices violations are always high on the list of common violations.

Set out in this chart are the notification requirements of the Equal Credit Opportunity Act and the Fair Credit Reporting Act. The FCRA notices include the new notices required by the FACT Act as well as the familiar FCRA adverse action notice. The chart even includes the risk-based pricing notice, even though there is no regulation on this yet. However, we've saved the space.

Use this chart for training and make copies for staff. We hope that the chart will raise the compliance level and lower the number of violations. And who knows? It might even reduce the number of phone calls you get!

Consumer Credit Application and Decision Notices .pdf chart

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 8, 7/05