Q: Do the risk-based-pricing notice requirements apply to business purpose credit?
A: No. The Fair Credit Reporting Act requirements only apply to consumer credit (i.e., primarily for personal, family, or household purposes).
The risk-based-pricing regulations come into play when a credit union:
Uses a consumer report in connection with a consumer credit application or extension; and
Based at least in part on that report, grants or extends credit to a consumer on “material terms” (i.e., APR) that are “materially less favorable” (i.e., higher cost for credit) than the most favorable terms available to a substantial portion of the credit union’s members for the same type of credit.
NEXT: Is an adverse action notice required when the member fails to return all of the paperwork necessary to process the loan?
More than 300 credit union compliance professionals from 237 credit unions and more than 20 associations attended last week’s CUNA/NASCUS BSA Conference to get the latest information on BSA compliance from regulators, attorneys and other compliance professionals.
The House Financial Services Committee completed its markup of 23 bills Wednesday, passing three CUNA-supported bills that CUNA President/CEO Jim Nussle said offer the kind of "targeted regulatory relief credit unions need."