Compliance Blog

Written by Steve Van Beek

The Federal Reserve has proposed changes to Regulation B and Regulation V.  These changes will incorporate section 1100F of Dodd-Frank which required risk-based pricing notices and adverse action notices to contain credit score information.  

Both of these proposals include changes to model forms used by a number of financial institutions - including credit unions.  Be sure to review the proposals and understand the impact of the new content requirements to ensure your credit unions understands the upcoming changes.  While these are only proposals, they are the strongest form of proposals: ones where the regulatory changes are specifically required by law (in this case Section 1100F of Dodd-Frank).

Some of you might be wondering:  We decided to use the "credit score disclosure exception" notices to meet the requirements of Regulation V.  Do we have to make changes?  

Here is what the Federal Reserve (and the FTC) said in the Regulation V proposal:

"Finally, the Agencies note that the January 2010 Final Rule provides exceptions to the requirements to provide general risk-based pricing notices for persons that provide credit score disclosure exception notices to consumers who request credit. See §§ 222.74(d), (e), and (f); §§ 640.5(d), (e),and (f). Nothing in section 1100F of the Dodd-Frank Act or this proposal limits the ability of creditors to provide these exception notices in lieu of the general risk-based pricing notice."  76 Fed. Reg. 13905.

But, keep in mind the Regulation B proposal for changes to the adverse action notices would still apply.  

NAFCU Members:  NAFCU's Regulatory Affairs team has produced a Regulatory Alert on the Regulation V proposal.  The Regulatory Alert on the Regulation B changes should be available shortly.