June 21, 2004
Fed Finalizes New Rule Requiring Lenders to Disclose to Consumers the Reporting of Negative Credit Information
As part of its implementation of the reauthorized Fair Credit Reporting Act, the Federal Reserve Board (the Fed) last week issued a final rule requiring that lenders who furnish negative information on a consumer to a consumer reporting agency (CRA) provide a disclosure of this negative notice in writing to the consumer. MBA submitted comments on this proposal to the Fed in early May, supporting the rule but urging that the Fed make several clarifications regarding how these disclosures are to be made and what they can include.
Under the final rule, which lenders must comply with by July 16, 2004, lenders must provide notice to the consumer no later than 30 days after furnishing the negative information to the CRA. After providing the notice, the lender may submit additional negative information pertaining to the same transaction without giving the consumer an additional notice.