11-EA-07: FRB and FTC:Risk-Based Pricing Disclosures

In January of 2010, the Federal Reserve Board (the Board) and the Federal Trade Commission (the FTC) (collectively the Agencies) issued a rule (the January 2010 Rule) to implement the risk-based pricing provisions of the Fair Credit Reporting Act (the FCRA). That rule went into effect on January 1, 2011. The January 2010 Rule requires creditors that extend credit, based on the individual's credit report, at material terms that are less favorable than the terms available to most customers to provide a risk-based pricing notice. The notice must include several specific disclosures; however, it is generally intended to inform consumers that the creditor used a credit report in making its decision and that information in the credit report impacts the terms available to the consumer.