Credit Scores to be Required on Adverse Action and Risk Based Pricing Notices

The Federal Reserve Board and the Federal Trade Commission proposed regulations that will be effective on July 21, 2011, regarding the credit score disclosure requirements of the Dodd-Frank Act. Under the Act, if a credit union uses a credit score in underwriting a consumer loan, then it will have to disclose that score to the member if he or she is negatively impacted by said score. 

The proposed rules will require that Risk Based Pricing notices (implemented in January of this year) have the member’s credit score as well as other related information. Adverse Action notices will also need to include the same information. 

Both notices would be amended to include the following:

  • A statement that a credit score takes into account information in a consumer report and a credit score can change over time;
  • The specific numerical credit score used in making the credit decision;
  • The range of possible credit scores;
  • Key factors that adversely affected the credit score such as late payments and high credit utilization;
  • The date on which the credit score was created; and
  • The name of the consumer reporting agency that provided the credit score.

Credit unions that opted to use the Credit Score Disclosure notice in lieu of the Risk Based Pricing notice will not be affected by the change to RBP notices. They will, however, have to modify their Adverse Action notices.

Once the model notices have been finalized, NWCUA will publish them, in Word format on its website.


Questions? Contact the Compliance Hotline: 1.800.546.4465 or email us at

Posted in Advocacy News, Compliance News.