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CUNA Regulatory Comment Call

June 18, 2004

EXECUTIVE SUMMARY

• The Federal Trade Commission (FTC) is requesting public comment on a study examining the effects of requiring that a consumer who has experienced an adverse action based on a credit report receive a copy of the same credit report that the creditor relied on in taking the adverse action. The study will examine the extent to which providing such reports to consumers would increase consumers’ ability to identity errors in and remove fraudulent information from their credit reports. This study is required under the Fair and Accurate Credit Transactions (FACT) Act.
• Currently, the Fair Credit Reporting Act requires those that take an adverse action to provide a notice that, among other items, contains contact information of the credit bureau that furnished the credit report and notifies the consumer of the right to receive a free copy of the report, as well as an explanation of the right to dispute information in the report. However, the report that the consumer may request may look different than the one the creditor relied upon to make its decision.
• The study will also compare the benefit to consumers with the costs of implementing this requirement, although recognizing that such an analysis will depend on the meaning of the term “the same credit report that the creditor relied on.” The study is specifically requesting comment on what should be the most and least expansive definition for this term, as well as the benefits and costs of these definitions.
• The study also requests responses on a wide variety of other questions. Of most significance to credit unions are the following:
  • Which party, the creditor or credit bureau, can provide the same report that the creditor relied on in taking the adverse action to consumers at least cost?
  • Why do creditors not give consumers a copy of this same report?
  • What would be the cost of requiring them to do so?
  • Does the cost vary depending on the credit-granting situation (for example, mortgages versus instant credit)?
  • Are there situations in which the cost of providing these same reports would be minimal or nonexistent? What are these situations?
  • What would the cost be to creditors to retool their credit granting process to produce consumer friendly versions of the consumer report that they relied on?
• Comments are due to the FTC by July 16, 2004. If you would like a copy of the FTC’s request, please access it on the Internet at the following address, which also provides detailed information on how to submit comments: http://www.ftc.gov/os/2004/06/040608factactfrn.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.