Last December, the Federal Reserve Board and Federal Trade Commission jointly issued final rules to implement the risk-based pricing (RBP) provisions of Section 311 of the Fair and Accurate Credit Transactions (FACT) Act, which amended the federal Fair Credit Reporting Act in 2003. The RBP rules represent the final piece of the FACT Act rule-making puzzle. Federal credit unions should follow the Fed’s rules and state-chartered credit unions should follow the FTC’s almost identical rules. The rules go into effect on Jan. 1, 2011.
The RBP regulations apply to consumer credit (primarily for personal, family, or household purposes), and only the original creditor is responsible for providing the notice (i.e., the creditor to whom the obligation is initially payable).
A credit union must provide an RBP notice when it:
The regulation includes model forms credit unions may use to comply with these notice requirements. Credit unions may make changes to these forms so long as they don’t change the substance, clarity, and sequence of the notices.