The RBP/Credit Exception Notice is one requirement, AAN is a separate requirement. Sending the correct notice for one does not fulfill the requirements of the other. Yes, it is redundant.

What's the effective date on this - 30 days from publication or July 21, 2011? I am thinking 30 days -but how can they supercede DF?

Found my answer - legally effective July 21, 2011.

The notice states "The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected soon."

I would expect this to be issued in the FR tomorrow or Friday.

I agree with mtngrrl...if you use the credit score exception notice you will have to provide two notices unless your forms vendor can somehow combine both notices into one.

I don't see anything that allows a vendor or anybody else to combine a RBP notice and an AAN. Am i missing something?

From the Section by Section analysis (p. 13): "Providing a form with credit score information separately from an adverse action notice does not appear to be consistent with the legislation."

Page 15 states that the FRB does not believe that a combined notice would be compliant with DF.

Ok--I just read that part. I was going on information I had learned prior to reading the final rule. I agree, it appears the final rule does not allow a combined notice. So, if you provide the credit score exeption notice, you will have two notices to provide, the exeption notice and AAN.

I have another question. If your primary applicant has a great credit score and your co-applicant has a terrible one, you would provide a Reg B AAN to the primary applicant (with no credit score disclosure or FCRA information-because the primary applicant's score did not play a role in decision) showing the co-applicant's problems (but not stating it was the co-applicant) and then provide an FCRA AAN to the co-applicant with a credit score disclosure. Is that correct?

Page 15 discusses co-applicants and states that the Board expects both to receive a notice and that the one with good credit will not be confused (although they may be surprised!).

In prior discussions with regulators on similar topics, they often encourage banks to "manage" such situations by providing required notices and also having a conversation with the customer(s). In this case, you could suggest that the one with good credit apply individually just as you would have in the past.

Thanks, Kathleen. I read that section, but was thinking the primary applicant would get his own score and then see "Bankruptcy" as a reason (due to the co-applicant), but I guess that gives the primary applicant a chance to get a free credit report!

But as I am thinking through your second comment - would you make a counteroffer to the primary applicant saying "apply individually or with an acceptable co-applicant" and then check the denial reasons applicable to the co-applicant and check the FCRA box and provide the primary applicant's credit score. Then to the co-applicant provide just the FCRA information with their credit score?

I am geting confused!

[quote=Kathleen B]Page 15 discusses co-applicants and states that the Board expects both to receive a notice and that the one with good credit will not be confused (although they may be surprised!).

quote]

Both would receive an AAN, but the applicant with a great credit score whose score did NOT play a part in the denial would not have the credit score disclosure portion filled in though.....right?

I can't get past the "if the credit score was a factor in the adverse action decision" language.

I agree with raitchjay that the primary applicant would not receive a credit score on his AAN because the score was not used in the descision.

But the credit score did play a role in the decision, just not the primary applicant's credit score. The language does not specify whose credit score - it just says credit score, right?

To me, this hinges somewhat on the language in FCRA which they reference on p. 15: "...the FCRA requires a creditor to provide the disclosures mandated (an AAN)...to 'any consumer' against whom adverse action is taken, if the adverse action is based in whole or in part on information from a consumer report." I don't see it specify that it would have to be information taken from THAT applicant's consumer report. So by that logic, you would send an AAN to both, but with the credit score information only for the applicant whose score was a "factor" in the decision.

(I'm just looking for discussion, not trying to state this as a fact......i'm just questioning the way i thought i would handle this.)

And then there is the argument of how do you prove to examiners that you didn't use the credit score on the credit report to make your decision when it was sitting right in front of you?

Interesting point SkiDoo....what i see on p. 15 is talking about who should receive an AAN, not whose AAN should have the credit score information included.

Right! I am not being argumentative either. I am just trying to figure out how to explain this to the staff. In one breath, I am saying give the score disclosure if there is a score anywhere in the file, and in another I am saying, well if the individual's score wasn't the problem - you can't them that and you can't give them a score disclosure. It is confusing to me, so I can't imagine how it will be for others.

So- what would it hurt if you did provide the score disclosure? Let's face it, if you have an 800 score and you get an AAN with "Bankruptcy" listed you are going to be pulling your credit report to look for ID Theft and calling your lender irate thinking there was an error.

I thought the same Queen Mum.....but i don't see that as the litmus test in the language provided here. I see "if the credit score was a factor in the adverse action decision"...if it's a "factor" in the decision, shouldn't one of your reasons checked match up to it. I think there are two issues here: if A (singular) credit score was used in the adverse action, (but the other applicant's score was not a factor), both receive an AAN, but do both get the credit score disclosure and 2) if you pull a credit report, but deny for reasons having nothing to do with the credit report (collateral value for example), does anyone get the credit score disclosure? I think the answer to 2 (my opinion for now anyway), is no. I'm leaning on question 1 to "only the applicant whose score was a 'factor' in the adverse action".

I think there's going to be confusion regardless, but if you fill out the credit score part and put "800" or whatever for the credit score, by the langugage that i'm seeing, you are saying, in effect, "your 800 credit score was a factor in the denial". That's why i'm leaning the other way.

If you don't include the 800 credit score, but send an AAN with credit based reasons (the other applicant's), i think that is less confusing, and at this point, i don't see the language that says that isn't the way to handle it. But again, maybe i'm missing something. Still just thinking out loud.

Raitchjay - I was re-reading p 6 and the comment "the Board does not believe that Section 1100F of the Dodd-Frank Act sets a high threshold for what constitutes use of a credit score." The following section "Use of a credit score" talks about not giving the disclosure if you didn't use <b> a <b> score.

However your argument sense too. Also, FWIW, I think you are 100% correct on your question #2.

SkiDoo: yes, i know the section you are referring to. It goes on to say: "A creditor that obtains a credit score and takes adverse action is required to disclose that score, unless the credit score played no role in the adverse action determination." How can someone's 800 credit score be a factor in the denial?

FWIW, i would rather just tell my lenders "if you pull a credit report and there's a score there, disclose it on the AAN"...that would be easier. I just wonder if that way will be perceived as the correct way by examiners. And SkiDoo.....thanks for the input.

raitchjay - I agree with what you posted above and that is how we are approaching this. If info from the credit report was a reason for denial then we provide the credit disclosure (we are going to provide to both). If we are denying based on length of employment, collateral etc. We will not be providing the credit disclosure.

This makes sense to everyone else?
What do we do if we pull a credit report (sent the disclosure) and two weeks later we deny for length of employment. Do we include the credit disclosure info in the AAN even though we are not denying based off of that information?

IMO, no. By "(sent the disclosure)", do you mean the RBPN or exception notice? The credit score disclosure requirements for the RBPN and AAN are separate and you can't satisfy one by doing the other. I say no because you are denying for a reason that has nothing to do with the credit report.