CUNA Regulatory Comment Call


May 25, 2004

Fed Study on Prescreened Solicitations
for Credit or Insurance

  • The Fair Credit Reporting Act (FCRA) currently provides that creditors and insurers in specific circumstances may use certain consumer reports as the basis for sending unsolicited offers of credit or insurance to consumers, known as “prescreened solicitations.” If not authorized by the consumer, the solicitation must be a “firm offer of credit,” meaning the offer will be honored if the consumer meets specific criteria. The consumer must also have been given the opportunity to “opt-out” of receiving such offers and elected not to do so.

  • The credit bureaus must establish procedures allowing consumers to notify the bureau that he or she wants to “opt-out” of these solicitations, either through a notification system maintained by the bureau, which must include a toll-free telephone number, or by submitting a “notice of election form” issued by the bureau. Requests made through the notification system expire after two years, while requests made by means of the election form never expire.

  • The Fair and Accurate Credit Transactions (FACT) Act requires the Federal Reserve Board (Fed) to conduct a study of the consumers’ ability to avoid receiving prescreened solicitations and the potential impact that any further restrictions on providing prescreened solicitations would have on consumers. The FACT Act also requires NCUA and the federal banking agencies to issue rules that will result in simple and easy to understand opt-out notices and will extend from two to five years the effective period for opt-outs that are requested through the notification system maintained by the credit bureau. CUNA will issue a Regulatory Comment Call at the time that these rules are proposed.

  • The study requests public comment on the following issues:
    • The mechanisms available to consumers to notify lenders and insurers that the consumer does not want to receive prescreened solicitations.
    • The extent to which consumers are using existing mechanisms to avoid prescreened solicitations and what percent have chosen to opt-out of the solicitations.
    • The benefits to consumers of prescreened solicitations.
    • The adverse effects or costs on consumers as a result of receiving prescreened solicitations.
    • The need for additional restrictions, if any, on the ability of credit bureaus, lenders, or insurers to provide prescreened solicitations to consumers.

  • Comments are due to the Fed by July 23, 2004. If you would like a copy of the Fed’s request, please access it on the Internet at the following address, which also provides detailed information on how to submit comments:
    http://www.federalreserve.gov/boarddocs/press/bcreg/2004/200405182/attachment.pdf

  • Please provide CUNA with a copy of your comments. You may fax your responses to CUNA at 202-638-7052; e- mail them to Associate General Counsel Mary Dunn at mdunn@cuna.coop and to Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601.

    • Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
    Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
    Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
    Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com
    Copyright © 2012 Credit Union National Association