If you use the alternate RBP notice when there is no credit score, is this only to be used on consumer loans secured by RE that don't have a score? Or is is any consumer loan (Re or non-RE) that doesn't have a credit score that get this notice?

I thought it was for any consumer loan without a score, but our software vendor support specialist just told me today that the "no score" alternate notice is only to be used on consumer loans secured by RE that don't have a score. Any help is appreciated.

It applies to any non-RE consumer credit request where there is no score. You still have to give the H-3 credit score disclosure with notice to home loan applicant if the loan will be secured by 1-4 family real estate.

I will disagree with this as well, CR...the Notice to Home Loan applicant would not apply in an instance where there is no score...the "no score" exception notice would be sufficient.

Complygirl, my understanding is as yours is..that the H-4 would be used on any consumer purpose risk-priced loan where there is no score.

Are you sure?

I gathered my interpretation from the example at 12 CFR §222.74(f)(2).

(2) Example. A person that uses consumer reports to set the material terms of non-mortgage credit granted, extended, or provided to consumers regularly requests credit scores from a particular consumer reporting agency and provides those credit scores and additional information to consumers to satisfy the requirements of paragraph (e) of this section. That consumer reporting agency provides to the person a consumer report on a particular consumer that contains one trade line, but does not provide the person with a credit score on that consumer. If the person does not obtain a credit score from another consumer reporting agency and, based in whole or in part on information in a consumer report, grants, extends, or provides credit to the consumer, the person may provide the notice described in paragraph (f)(1)(iii) of this section. If, however, the person obtains a credit score from another consumer reporting agency, the person may not rely upon the exception in paragraph (f) of this section, but may satisfy the requirements of paragraph (e) of this section.

I read this to say that you couldn't use the H-5 for 1-4 family RE secured loans.

The problem is this. Read the NTHLA..At first, I thought the same thing, but it was pointed out (and shame on me for NOT reading it!) that the NTHLA is all about the score, the reasons for the score, etc. It is meaningless if there is no score.

Now, what are the chances that a mortgage would be granted to someone with no score..probably slim to none...but if it were to happen, the NTHLA would be worthless.

Yes, the NTHLA is definitely credit score driven. And I've read it several times, but for some reason this paragraph made me think otherwise.

But, you are correct. The preamble does clarify this.

Pg. 2744

[...] paragraph (f) [H-5] created an exception to the risk=based pricing notice requirement for creditors that regularly use one of the credit score disclosure exceptions in proposed paragraph (d) [H-3] or (e) [H-4], but are unable to provide the notices described in those paragraphs to a consumer because a credit score is not available for that consumer.

Pg. 2745

[...] The Agencies conclude that consumers with limited credit histories will benefit from receiving a notice indicating that they do not have a credit score because there were insufficient information in their consumer reports. [...] Therefore, paragraph (f) of the final rule is adopted as proposed [...].

Great back up and a good resource if we end up having this arguement down the road with an examiner!

What are your thoughts on the following:

Reference 1: Reg V - Fair Credit Reporting par 222.74(d)(2)(ii) which cites Reference 2: FCRA par 609(g)(1)(D).

To paraphrase Ref 1, the exception notice must be sent with the NHLA. However, Ref 2 states in par (1) and par (1)(D)the NHLA must be provided when a credit score is used.

Conclusion: If a credit score is not available, a credit score was not used and the NHLA is not required. Therefore, H-5 meets the requirements for all loan products.

That's my conclusion...yes.