Our Statement of Credit Denial, Termination or Change (Cx15858) is primarily provided pursuant to 15 U.S.C.A. §§ 1681m(a) & (b) and 1691 et seq. and 12 C.F.R. § 1002.9. It incorporates duplicates of Model Forms C-1, C-4, & C-6 (Ibid. App. C). Part II of the Form C-1 version of the document consists of two subparts: (1) one is checked if the credit decision was based in whole or in part on information obtained from a consumer reporting agency; and (2) the other is checked if the decision was based in whole or in part on information obtained from a person other than a consumer reporting agency and/or if certain information was obtained from an affiliate. As more thoroughly outlined by Regulation B:
“Form C-1 contains the Fair Credit Reporting Act disclosure as required by sections 615(a) and (b) of that act [15 U.S.C.A. § 1681m{a} & {b}]. . . . A creditor must provide the section 616(a) disclosure when adverse action is taken against a consumer based on information from a consumer reporting agency. A creditor must provide the section 615(b) disclosure when adverse action is taken based on information from an outside source other than a consumer reporting agency. In addition, a creditor must provide the section 615(b) disclosure if the creditor obtained information from an affiliate other than information in a consumer report or other than information concerning the affiliate’s own transactions or experiences with the consumer. Creditors may comply with the disclosure requirements for adverse action based on information in a consumer report obtained from an affiliate by providing either the section 615(a) or section 615(b) disclosure. . . .” (12 C.F.R. Pt. 1002, App. C[2])
To improve the logic behind checking these two subparts, we will be changing the default logic for selecting the first subpart (credit decision based on credit report) as follows:
- This will not be selected if either:
- Fields 38570, 52156, 52158, & 52160 (“Borrower X Adverse Action – Credit decision based on Consumer reporting agency”) equal “No”; or
- Fields 48972 through 48975 (“Borrower X Credit Score Agency Disclosure Type”) equals “None” or do not have any values.
- If this subpart is not selected, the name, address, and toll-free telephone number of the consumer reporting agency, which are disclosed after the first paragraph, will not be populated and blank lines will appear instead. In addition, the paragraph following these, which discloses the information related to the borrower’s credit score, will not print.
- If Fields 38570, 52156, 52158, or 52160 equal “Yes”, then this subpart will be checked on the corresponding borrower copy, and the appropriate contact information for the credit reporting agency, as well as the paragraph related to the borrower’s credit score, will be disclosed.
- If Fields 38570, 52156, 52158, or 52160 are not set, current logic will be used for determining when this subpart is checked.
Essentially, this change allows clients to more directly control whether the “Credit decision based on Consumer reporting agency” checkbox is checked, along with the population of the correlating information and credit score paragraph. Please note that if these sections are already working adequately for clients, no changes are needed.
In addition to this change, we will be using the above logic to trigger the California Addendum which prints within this document code. This will be done due to the following requirement, which practically requires this addendum to print when the first subpart of Part II is selected:
“If any person takes any adverse action with respect to any consumer, and the adverse action is based, in whole or in part, on any information contained in a consumer credit report, the person shall do all of the following: . . .
(4)(A) The right of the consumer to obtain within 60 days a free copy of the consumer’s consumer credit report from the consumer credit reporting agency identified pursuant to paragraph (2) and from any other consumer credit reporting agency which compiles and maintains files on consumers on a nationwide basis.” (Cal. Civ. Code § 1785.20[a])
These changes will take effect on December 19, 2020. Questions or concerns about these changes should be directed towards Client Support at 1.800.497.3584.
TW 286150 & 286488
DR 331269