Federal Reserve Board Proposes Fair Credit Reporting Rules
April 6, 2004
Offers Model Form for Correcting Negative Information Furnished To Consumer Reporting Agencies
The Federal Reserve Board on Wednesday issued proposed amendments to Regulation V, which implements the Fair Credit Reporting Act (FCRA). The amendments would add a model form for financial institutions to use if they furnish negative information to consumer reporting agencies.
Under the Fair and Accurate Credit Transactions Act (FACT Act) amendments to the FCRA, the Board is required to publish, after notice and comment, a concise model form (not to exceed thirty words in length) that financial institutions may use to comply with the notice requirement for furnishing negative information to consumer reporting agencies. The model form must be issued in final form by June 4, 2004.
The FACT Act provides that if any financial institution (1) extends credit and regularly and in the ordinary course of business furnishes information to a nationwide consumer reporting agency, and (2) furnishes negative information to such an agency regarding credit extended to a customer, the institution must provide a clear and conspicuous notice about furnishing negative information, in writing, to the customer. "Negative information" means information concerning a customer's delinquencies, late payments, insolvency, or any form of default.
The FACT Act defines the term "financial institution" to have the same meaning as in the Gramm-Leach-Bliley Act, which generally is "any institution the business of which is engaging in financial activities as described in section 4(k) of the Bank Holding Company Act of 1956."
The Board's model form could be used by all financial institutions, as defined by the act. Comment on the proposed rule must be received by May 9, 2004.
Source; Federal Reserve Board