To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
In a press release, the Federal Reserve Board announced 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 have to furnish any negative information to consumer reporting agencies. "Negative information" means information concerning a customer's delinquencies, late payments, insolvency, or any form of default.
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 that financial institutions may use to comply with the notice requirement for furnishing negative information to consumer reporting agencies.
The FACT Act provides that if any financial institution:
- extends credit and regularly in the normal course of business furnishes information to a nationwide consumer reporting agency, and
- 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.
The Board's model form could be used by all financial institutions. The Board invites public comments on the proposed rule by May 9, 2004.
Legal and Compliance Risk Department