FAIR CREDIT REPORTING RISK-BASED PRICING REGULATIONS

{see} Magazine’s CDIA Corner

In late-May 2008, the Federal Reserve Board and the Federal Trade Commission announced proposed regulations that generally would require a creditor to provide a consumer with a risk-based pricing notice when, based in whole or in part on the consumer's credit report, the creditor offers or provides credit to the consumer on terms less favorable than the terms it offers or provides to other consumers.

The proposed rule is quite broad and creates notices for many consumers, not just those applying for new credit. The proposal offers a variety of complex and technical ways creditors can comply with the rule, including different types of notices offered at different points in a transaction. Unfortunately, the proposal raises many questions without providing many answers.

The FRB and the FTC requested public input on the proposal by Aug. 18. CDIA, along with many financial institutions and retailers, will be providing a comment on the proposed rulemaking.

Download the Full FTC Proposal Here

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