The Fair Credit Reporting Act (FCRA) is a federal law that addresses the rights and obligations of four groups:
�Consumer reporting agencies
�Users of consumer information
�Furnishers of consumer information
�Consumers
The Fair Credit Reporting Act (FCRA) is a federal law that requires:
Lenders, employers, insurance companies, and anyone using a consumer report to exercise fairness, confidentiality, and accuracy in preparing, submitting, using, and disclosing credit information. This law regulates the reporting and use of consumer credit
What to do?
Free file disclosure once per year from each of the major credit bureaus. Ask for your credit score (there may be a fee).
Verify accuracy of report when required for employment purposes.
Notification if your file has been used against you.
Dispute and cor
FCRA
The Fair Credit Reporting Act (FCRA) is the act that regulates the collection of credit information and access to your credit report.
It was enacted in 1970 to ensure fairness, accuracy and privacy of the personal information contained in the files of the
The two most extensive amendments were:
The Consumer Credit Reporting Reform Act of 1996 (the "1996 amendments") and the Fair and Accurate Credit Transactions Act of 2003("FACT Act").
The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA) role:
Amended the FCRA by adding consumer protections intended to help reduce identity theft. The Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) added further disclosure requirements to help consumers understand their consumer credit scores whe
The FCRA regulates the practices of consumer reporting agencies ("CRAs")
collect and compile consumer information into consumer reports for use by credit grantors, insurance companies, employers, landlords, and other entities in making eligibility decisions affecting consumers. Information included in consumer reports generall
Consumer report information may be used by entities to predict the risk of future nonpayment, default, or other adverse events
The FCRA was enacted to (1) prevent
the misuse of sensitive consumer information by limiting recipients to those who have a legitimate need for it; (2) improve the accuracy and integrity of consumer reports;and (3) promote the efficiency of the nation's b
Section 623 of the FCRA describes the responsibilities of banks (furnishers)that furnish information about consumers to consumer reporting agencies (CRAs). The FACT Act amended the FCRA to add additional requirement addressing the accuracy and integrity o
�Ensure that they provide complete and accurate information
�Ensure that any information reported is done so with integrity
�Investigate disputed information and promptly correct or update the information, as necessary, or explain why the credit report is
ChecxSystem
Chex Systems, Inc. (ChexSystems) is a nationwide specialty consumer reporting agency under the federal Fair Credit Reporting Act (FCRA). ChexSystems' clients regularly contribute information on closed checking and savings accounts
The three Nationwide CRAs (Equifax, Experian, and TransUnion) and specialty CRAs that offer deposit account verification services, such as ChexSystems, which has a number of the following responsibilities under FCRA:
�Maintaining accurate information in their files
�Following up with any disputes regarding inaccurate information
�Providing consumer reports to banks and other users of information and correcting inaccurate information as needed
�Maintaining active duty
Investigative reports
An investigative consumer report is a special type of consumer report in which information
about a consumer's character, general reputation, personal characteristics, and mode of living is obtained through personal interviews.
Making a particularly risky
Consumer Reports
A consumer report contains information on the consumer's creditworthiness or general reputation. The information on the consumer report is used or is expected to be used or collected for the purpose of serving as a factor in establishing consumer's eligib
Fact Act
1. FCRA - Fair Credit Rporting Act >
1.1. NCUA
1.2. Federal Trade Comission
1.3. Federal Banking Regulators
ChexSystems
ChexSystems,is another credit reporting agency, that deals with negative bank information. It has nothing to do with FICO scores or the big three consumer credit reporting bureaus, but it is where an overdraft debt is most likely to end up.
ChexSystems is
Who Regulates Whom?
1. Office of the Comptroller of the Currency (OCC)
2. Federal Reserve
3. Federal Deposit Insurance Corporation (FDIC)
4. Consumer Finance Protection Bureau (CFPB)
5. National Credit Union Administration
6. State regulatory agencies
Office of the Comptroller of the Currency (OCC)
National banks, federal branches, federal agencies of foreign banks, and institutions formerly regulated by the OTS, as of July 21, 2011.
Federal Reserve
State member banks, branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks and organizations operating under Se
Federal Deposit Insurance Corporation (FDIC)
State non-member banks and insured state branches of foreign banks.
Consumer Finance Protection Bureau (CFPB)
Financial institutions with more than $10 billion in assets. However, the Bureau also has direct regulatory authority over many state-based entities that offer financial products or services.
National Credit Union Administration
Federal credit unions.
State regulatory agencies
Each state has its own agency that regulates state-chartered credit unions and banks.
What must entities do when reporting information to a CRA?
Submit all information with accuracy and integrity
Bill Ding wants to open an account with Community Bank. As part of the account opening process, Barry, the CSR, obtains a report from an agency that compiles information on mishandled checking and savings accounts. The report states that Bill's account ha
Barry has obtained a consumer report. The agency that compiles and sells this information to banks (e.g., a deposit account verification service) is a consumer reporting agency that collects information from other sources that bear on a consumer's individ
Anna Conda wants to apply for a teller position with Community Bank. As part of the application process, Jake the HR representative, contacts the local courthouse to verify that Anna has no criminal record. Has Jake obtained a consumer report?
Jake has not obtained a consumer report. Information obtained directly from the source, such as the court, is not considered a consumer report. For example, if Jake declines Anna's application for employment because the court records showed that Anna had
An information furnisher is a company that provides information to consumer reporting agencies (CRAs). Banks provide a huge amount of the following information to consumer reporting agencies:
�Payment history on credit cards and loans
�Account history, such as deposit accounts closed due to fraud or abuse
Other entities that furnish information to CRAs can include courts (reporting judgments or bankruptcies), current and former employers, and
What are Specialty CRAs ?
They collect and report information about a consumer to employers, insurance companies, banks, and landlords.
They include entities other than the big three CRAs: Experian, Equifax, and TransUnion, Specialty CRAs may report on a consumer's medical conditi
Buck Shott has applied for a supervisory position at the ammunition factory where he is employed. Due to the sensitive nature of this position, Buck's employer has requested and obtained a credit report on Buck, which shows that four times Buck was 60 day
C and D are Correct
A is incorrect because a denial of employment due to erroneous information is covered and must be investigated.
B is incorrect because under the new FACT Act revised rules, consumers are permitted to dispute erroneous information direc
You are a lender at your bank and often obtain consumer reports for loan applicants. Your neighbor, Owen Moore, who is not a customer of your bank, has been having problems with past due bills. He asks you to please obtain his consumer report. He wants to
No. You do not have a permissible purpose to obtain that consumer report. When your bank requests a consumer report, the bank certifies to the CRA that it has a legitimate business reason for the report. Mr. Moore is not a loan applicant, is not applying
Bill Foldes, president of Billfolds R Us, Inc., has applied for a commercial line of credit for his business. Mr. Foldes will not be personally responsible for the loan. Under FCRA, does your bank have a permissible purpose to obtain a consumer report on
No. Because Mr. Foldes is not personally liable for the debt, your bank does not have a permissible purpose under FCRA to obtain a consumer report. However, if Mr. Foldes gives written consent, you may do so.
Neverland, Inc. needs a business loan to open a new location in the suburbs. The bank has asked Peter Pann, one of the principals of the business, to personally guarantee the loan. Does the bank have a permissible purpose to obtain a consumer report on Mr
Yes. Because Mr. Pann may become personally liable for repayment of the debit, a permissible purpose for obtaining a consumer report exists.
Lacy and Casey Macey have had a mortgage with your bank for 10 years. Property values have risen in your neighborhood and you are sure that they have enough equity in their home to get a home equity line of credit. However, you do not want to offer them t
No. Although you may obtain a credit report for review purposes, you may do that solely to decide whether to modify the terms of the existing account. The solicitation of a new product or service is not a permissible purpose under the FCRA.
Credit Extension When a consumer applies for a loan for personal, family, or household purposes
Business Need When a consumer applies to open a deposit account
Account Review To decide whether to modify the terms of the existing account
Insurance underwri
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Medical information
Information or data, whether oral or recorded, in any form or medium, created by, or derived from, a health care provider or the consumer, that relates to the past, present, or future physical, mental, or behavioral health or condition
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