Fed to Host Free Webcast on Risk-based Pricing Notices
The Federal Reserve System will conduct a webcast on risk-based pricing notices on February 16. This webinar is part of an ongoing series focused specifically on consumer compliance issues.
February 10, 2011
The Federal Reserve System will conduct a webcast on risk-based pricing notices on February 16, from 11 a.m. – 12 p.m. Pacific Time. This webinar is part of an ongoing series focused specifically on consumer compliance issues. Register for the FREE webinar on the Outlook Live website.
The mandatory compliance date for the risk-based pricing notice requirements was January 1, 2011. The rules generally require creditors to provide a notice to consumers when, based in whole or part on information in a consumer report, the creditor grants credit to the consumer on material terms that are materially less favorable than the most favorable terms available from the creditor to a substantial proportion of other consumers.
To facilitate compliance, the rules provide different methods that a creditor can use to determine when it is offering credit to a consumer on materially less favorable terms than it provides to other consumers, thus triggering a risk-based pricing (RBP) notice to the consumer.
As an alternative to providing RBP notices, the rules permit creditors to provide a credit score exception notice to all consumers who request credit. These notices provide consumers with a free credit score and information about their score.
The RBP notices and credit score exception notices are intended to educate consumers about the connection between the quality of their credit data and the resulting credit costs. Consumers who receive a RBP notice are able to obtain a free credit report to review the accuracy of their report, in addition to their free annual reports.