Risk-Based Pricing Notice Final Rule!!!; HMDA Asset-Size Exemption
Posted by Anthony Demangone
I'm assuming many of you have attended a high school reunion. At every reunion I've attended, the following takes place.  An unexpected classmate walks in the door, and every jaw in the joint drops. That happened yesterday to me, in a compliance-sort of way.
Door creaks open. (Enter the final rule for Risk-Based Pricing Notices.)
Anthony: Holy cow! Where have you been? We've lost touch. What has it been....4 years?!
Yes, the long-awaited final rule for risk-based pricing notices has finally arrived.
The Federal Reserve Board and the Federal Trade Commission today announced final rules that generally require a creditor to provide a consumer with a notice when, based on the consumer's credit report, the creditor provides credit to the consumer on less favorable terms than it provides to other consumers. Consumers who receive this "risk-based pricing" notice will be able to obtain a free credit report to check the accuracy of the report.
Risk-based pricing refers to the practice of setting or adjusting the price and other terms of credit provided to a particular consumer based on the consumer's creditworthiness. The final rules provide creditors with several methods for determining which consumers must receive risk-based pricing notices.
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As an alternative to providing risk-based pricing notices, the final rules permit creditors to provide consumers who apply for credit with a free credit score and information about their score. Today, most consumers must pay a fee to obtain their credit score.
Compliance date? July 1, 2010. Just kidding!  The rule becomes effective on January 1, 2011.Â
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The HMDA asset-size exemption remains unchanged at $39 million for 2010.
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NAFCU's offices are closed today and tomorrow. We'll get back at it on Monday. Happy Holidays, everyone.