April 13, 2004
To: All Member Banks and Others Concerned in the Third Federal Reserve District
Attention: Chief Executive Officer and Chief Compliance Officer
Subject: FAIR CREDIT REPORTING ACT (REGULATION V): PROPOSED RULE
The Board of Governors of the Federal Reserve System has 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.
The Federal Register notice, published April 12, 2004, is available here (150 KB, 6 pages).
Date: Comment on the proposed rule must be received by May 9, 2004.
For Further Information: Krista P. DeLargy, Senior Attorney; David A. Stein, Counsel; Minh-Duc T. Le or Ky Tran-Trong, Senior Attorneys; Division of Consumer and Community Affairs, (202) 452-3667 or (202) 452-2412; Thomas E. Scanlon, Counsel, Legal Division, (202) 452-3594, Board of Governors of the Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551; for users of Telecommunications Device for the Deaf (“TDD”) only, contact (202) 263-4869.