Kyle Greene of the law firm Morris Hardwick Schneider, Legal Counsel to the Georgia Association of Mortgage Brokers, has provided the following update on changes to the Fair Credit Reporting Act on behalf of the GAMB Legislative Committee.

Certain provisions of the Fair and Accurate Credit Transaction Act of 2003 (the "FACT Act") went into effect on December 4, 2004 concerning the use of credit scores in the origination of residential mortgages. The FACT Act amends the Fair Credit Reporting Act (the "FCRA"), 15 U.S.C. 1681-1681y, by adding the new requirements, among other changes designed to address identity theft. The changes to disclosure requirements concerning credit scores are summarized below.

 The amendments at § 609(g) (15 U.S.C. 1681g) add the new disclosure requirement for residential mortgage loans. Any person who makes or arranges consumer loans secured by residential (1 to 4 units) real property and uses a consumer credit score in connection with the application must provide the following to the consumer as soon as reasonably practicable:

  A copy of the information obtained from the consumer reporting agency which includes at least the following information:
 

• The name, address, and telephone number of each consumer reporting agency providing a credit score or credit file upon which the credit score was created;
• The current or the most recent previously calculated credit score of the consumer; The range of possible scores under the model used; All key factors adversely affecting the credit score up to a maximum of 4 (except that if the number of inquiries was a factor, it must be listed in addition to the other 4); and,
• The date that the credit score was created.
• A copy of the actual credit report is not required.
   

 Suggested forms are already available on the NAMB website, as well as a copy of "Rules Regarding the Use of the National Credit Score Disclosure and Notice to Home Loan Applicant." You can access and download the form and the rules summary by logging on to the Members Only section. You will need your NAMB Member Number, and your last name is you password. To find your NAMB Member Number, look at the mailing label on your copy of National Mortgage Broker Magazine, or call NAMB at (703) 610-9009. Additional information is also available on the Federal Trade Commission's website at www.ftc.gov . A fairly informative summary titled "Notice to Users of Consumer Reports: Obligations of Users Under the FCRA" is at www.ftc.gov/os/2004/11/041119factaapph.pdf

  *This Update is for informational purposes only and is not to be considered legal advice or opinion. Members with questions or concerns regarding compliance issues should consult outside counsel.
 

Changes to the Fair Credit Reporting Act (pdf)