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Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Proposed Rules

(d) Commercial consignments.
Tomatoes with stems from the Republic
of Korea may be imported in
commercial consignments only.
(e) Phytosanitary certificate. Each
consignment of tomatoes must be
accompanied by a phytosanitary
certificate of inspection issued by the
NPPO of the Republic of Korea bearing
the following additional declaration:
‘‘Tomatoes in this consignment were
grown in pest-exclusionary structures in
accordance with 7 CFR 319.56–51 and
were inspected and found free from
Bactrocera depressa, Heliocoverpa
armigera, Heliocoverpa assulta,
Mamestra brassicae, Ostrinia furnacalis,
Scirtothrips dorsalis, and Thrips palmi.’’
Done in Washington, DC, this 9th day of
March 2011.
Kevin Shea,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. 2011–5963 Filed 3–14–11; 8:45 am]
BILLING CODE 3410–34–P

FEDERAL RESERVE SYSTEM
12 CFR Part 202
[Regulation B; Docket No. R–1408]
RIN No. 7100–AD67

Equal Credit Opportunity
Board of Governors of the
Federal Reserve System (Board).
ACTION: Notice of proposed rulemaking.
AGENCY:

Section 701 of the Equal
Credit Opportunity Act (ECOA) requires
a creditor to notify a credit applicant
when it has taken adverse action against
the applicant. The ECOA adverse action
requirements are implemented in the
Board’s Regulation B. Section 615(a) of
the Fair Credit Reporting Act (FCRA)
also requires a person to provide a
notice when the person takes an adverse
action against a consumer based in
whole or in part on information in a
consumer report. Certain model notices
in Regulation B include the content
required by both the ECOA and the
FCRA adverse action provisions, so that
creditors can use the model notices to
comply with the adverse action
requirements of both statutes. The Board
proposes to amend these model notices
in Regulation B to include the
disclosure of credit scores and
information relating to credit scores if a
credit score is used in taking adverse
action. These proposed amendments
reflect the new content requirements in
section 615(a) of the FCRA that were
added by section 1100F of the Dodd-

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SUMMARY:

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Frank Wall Street Reform and Consumer
Protection Act.
DATES: Comments must be received on
or before April 14, 2011. Comments on
the Paperwork Reduction Act analysis
set forth in Section III.A. of this Federal
Register notice must be received on or
before May 16, 2011.
ADDRESSES: You may submit comments,
identified by Docket No. R–1408, by any
of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments
on the http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• FAX: 202–452–3819 or 202–452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper in Room MP–500 of the Board’s
Martin Building (20th and C Streets,
NW.) between 9 a.m. and 5 p.m. on
weekdays.
FOR FURTHER INFORMATION CONTACT:
Board: Mandie K. Aubrey, Senior
Attorney, or Catherine Henderson,
Attorney, Division of Consumer and
Community Affairs, (202) 452–3667 or
(202) 452–2412, Board of Governors of
the Federal Reserve System, 20th and C
Streets, NW., Washington, DC 20551.
For users of a Telecommunications
Device for the Deaf (TDD) only, contact
(202) 263–4869.
SUPPLEMENTARY INFORMATION:
I. Background
The Equal Credit Opportunity Act
(ECOA), 15 U.S.C. 1691 et seq., makes
it unlawful for creditors to discriminate
in any aspect of a credit transaction on
the basis of sex, race, color, religion,
national origin, marital status, or age
(provided the applicant has the capacity
to contract), because all or part of an
applicant’s income derives from public
assistance, or because an applicant has
in good faith exercised any right under

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the Consumer Credit Protection Act.
The Board’s Regulation B (12 CFR part
202) implements the ECOA.
Section 701(d) of the ECOA generally
requires a creditor to notify a credit
applicant against whom it has taken an
adverse action. Under section 701(d)(6)
of the ECOA, an adverse action
generally means a denial or revocation
of credit, a change in the terms of an
existing credit arrangement, or a refusal
to grant credit in substantially the
amount or on substantially the terms
requested.
Section 615(a) of the FCRA also
requires a person to provide an adverse
action notice when the person takes an
adverse action based in whole or in part
on information in a consumer report.
The definition of adverse action in
section 603(k) of the FCRA incorporates,
for purposes of credit transactions, the
definition of adverse action under
ECOA. The adverse action provisions in
both the ECOA and the FCRA require
certain disclosures to be given to
consumers.
The ECOA adverse action provisions
are implemented in Regulation B. There
are no implementing regulations for the
adverse action requirements of section
615(a) of the FCRA. However, as
explained in comment 202.9(b)(2)–9 of
Regulation B, certain model notices in
Regulation B include the content
required by both the ECOA and the
FCRA, so that persons can use the
model notices to comply with the
adverse action requirements of both
statutes.
On July 21, 2010, the Dodd-Frank
Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) was
signed into law. Public Law 111–203,
124 Stat. 1376. Section 1100F of the
Dodd-Frank Act amends section 615(a)
of the FCRA to require creditors to
disclose on FCRA adverse action notices
a credit score used in taking any adverse
action and information relating to that
score. The effective date of these
amendments is July 21, 2011.1
The Board is proposing to amend
those model adverse action notices in
Regulation B which incorporate the
content requirements of section 615(a)
of the FCRA to reflect the new content
requirements added by section 1100F of
the Dodd-Frank Act. These revisions to
the model notices will help facilitate
uniform compliance when section
1100F of the Dodd-Frank Act becomes
effective. Thus, pursuant to its authority
1 Section 1100H of the Dodd-Frank Act provides
that the amendments in Subtitle H of Title X, which
includes Section 1100F, become effective on the
‘‘designated transfer date.’’ The Secretary of the
Treasury set the designated transfer date as July 21,
2011. 75 FR 57252 (Sept. 20, 2010).

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Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Proposed Rules
in section 703(a) of the ECOA, the Board
is proposing to amend certain adverse
action model notices in Regulation B
consistent with the requirements of
section 1100F of the Dodd-Frank Act.

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II. Section-by-Section Analysis
Appendix C to Part 202—Sample
Notification Forms
Under section 701(d) of the ECOA, a
creditor must provide to applicants
against whom adverse action is taken
either: (1) A statement of reasons for
taking the adverse action as a matter of
course; or (2) a notification of adverse
action which discloses the applicant’s
right to a statement of reasons within
thirty days after receipt by the creditor
of a request made by the applicant
within sixty days after the written
notification. Section 615(a) of the FCRA
requires a person to provide in an
adverse action notice information
regarding the consumer reporting
agency that furnished the consumer
report used in taking the adverse action.
It also requires a person to disclose that
a consumer has a right to a free credit
report and right to dispute the accuracy
or completeness of any information in a
consumer report.
Section 1100F of the Dodd-Frank Act
amends section 615(a) of the FCRA to
require that creditors disclose additional
information on FCRA adverse action
notices. Specifically, a person must
disclose on a FCRA adverse action
notice a credit score used in taking any
adverse action and information relating
to that score, in addition to the
information currently required by
section 615(a) of the FCRA. The statute
generally requires that the FCRA
adverse action notice include: (1) A
numerical credit score used in making
the credit decision; (2) the range of
possible scores under the model used;
(3) the key factors that adversely
affected the credit score of the consumer
in the model used; (4) the date on which
the credit score was created; and (5) the
name of the person or entity that
provided the credit score.
As explained in paragraph 2 of
Appendix C to part 202, model notices
C–1 through C–5 may be used to comply
with the adverse action provisions of
both the ECOA and the FCRA. The
Board proposes to amend model notices
C–1 through C–5 to incorporate the
additional content requirements
prescribed by section 1100F of the
Dodd-Frank Act.
Under the proposal, Forms C–1
through C–5 would be revised to
include, as applicable, a statement that
the creditor obtained the consumer’s
credit score from a consumer reporting

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agency named in the notice and used
the score in making the credit decision.
The notice would also state that a credit
score is a number that reflects the
information in the consumer’s credit
report and that the consumer’s credit
score can change, depending on how the
information in the consumer’s credit
report changes. The model notices
would also provide space for the
creditor to include the content required
under section 1100F of the Dodd-Frank
Act that is specific to the consumer.
This content includes: the consumer’s
credit score, the date the credit score
was created, the range of possible credit
scores under the model used, and up to
four key factors that adversely affected
the consumer’s credit score (or up to
five factors if the number of enquiries
made with respect to that consumer
report is one of the factors).
In addition to the content added to
each of Forms C–1 through C–5, Form
C–3 would be amended for clarity. Form
C–3 is a model notice that can be used
by creditors in circumstances where the
creditor uses a proprietary credit scoring
system to make a credit decision and
where the creditor uses information
from a consumer reporting agency in
this scoring evaluation. As discussed
above, section 1100F of the Dodd-Frank
Act requires information regarding a
credit score that is obtained from a
consumer reporting agency to be
included on an adverse action notice.
The Board believes discussing two
different types of credit scoring systems
on Form C–3 could be confusing for
consumers. Therefore, the Board
proposes to amend Form C–3 to clarify
the differences between a proprietary
score and a credit score that is obtained
from a consumer reporting agency. The
text would clarify that the consumer’s
application was processed by a system
that assigns a numerical value to the
various items of information the creditor
considers when evaluating the
consumer’s application. This numerical
value is based upon analyses of
repayment histories of the creditor’s
customers. The proposed form would
also add topic headings to help
distinguish the different types of scores
that were used in making the credit
decision. It would also remove the
reference to credit scoring in the title of
the form.
In some cases, a person who is
required to provide an adverse action
notice under the FCRA may use a
consumer report, but not a credit score,
in taking the adverse action. Under
section 1100F of the Dodd-Frank Act, a
person is not required to disclose a
credit score and related information if a
credit score is not used in taking the

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13897

adverse action. Therefore, the
amendments to Forms C–1 through
C–5 are only applicable if a credit score
is used in taking an adverse action. A
person may amend, at its option, Form
C–3 to add the additional headings and
remove the reference to a credit scoring
system, even if the person does not add
the heading and information about the
consumer’s credit score.
The Board notes that section 1100F of
the Dodd-Frank Act requires a creditor
to provide, if applicable, a consumer’s
credit score and related information,
regardless of whether it provides a
statement of specific reasons for taking
the adverse action or a disclosure of the
applicant’s right to a statement of
specific reasons for an adverse action.
Therefore, a creditor would not comply
with the FCRA adverse action
provisions by providing the required
FCRA disclosures only if a consumer
responds to a request for a statement of
specific reasons for an adverse action.
As a result, proposed Form C–5 reflects
the requirement to provide the
disclosures required by section 615(a) of
the FCRA, including the consumer’s
credit score and the key factors that
adversely affected the credit score, at
the time a creditor provides a disclosure
of the applicant’s right to a statement of
specific reasons for an adverse action.
The Board requests comment on
whether the proposed revisions to the
content of the adverse action model
notices are appropriate. The Board also
solicits comment on whether additional
or different changes to the model
notices should be adopted.
The Board also proposes to amend
paragraph 2 of Appendix C, which
discusses the disclosure requirements of
section 615 of the FCRA that are
contained in Forms C–1 through C–5.
Paragraph 2 explains that Form C–1
contains the disclosures required by
sections 615(a) and (b) of the FCRA, and
Forms C–2 through C–5 contain only
disclosures required by section 615(a) of
the FCRA. Paragraph 2 also describes
the circumstances under which a
creditor must provide the section 615(a)
disclosures or the section 615(b)
disclosures.
The paragraph states that the
combined ECOA–FCRA disclosures in
Form C–1 through Form C–5 must state
that a creditor obtained information
from a consumer reporting agency.
Consistent with section 1100F of the
Dodd-Frank Act, the paragraph would
be revised to state that the combined
disclosure must also include, as
applicable, a credit score used in taking
adverse action along with related
information. The paragraph would also
be revised to clarify that information

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Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Proposed Rules

from a consumer reporting agency was
considered in the credit decision.
Supplement I to Part 202—Official Staff
Interpretations
The Board proposes to amend
comment 9(b)(2)–9 to reflect the
proposed changes to the adverse action
model notices. Comment 9(b)(2)–9
addresses the combined ECOA–FCRA
adverse action disclosures. The
proposed amendment would clarify that
the FCRA requires a creditor to disclose,
as applicable, a credit score it used in
taking adverse action along with related
information, including the key factors
that adversely affected the consumer’s
credit score. It would also eliminate a
statement that is redundant.
The proposed amendment to
comment 9(b)(2)–9 would also clarify
that disclosing the key factors that
adversely affected the consumer’s credit
score does not satisfy the ECOA
requirement to disclose specific reasons
for denying or taking other adverse
action on an application or extension of
credit. The Board recognizes that a key
factor(s) that adversely affected the
consumer’s credit score may be the
same as a specific reason(s) for denying
credit or taking other adverse action.
However, some specific reasons for
taking adverse action may be unrelated
to a consumer’s credit score, such as
reasons related to the consumer’s
income, employment, or residency.
Therefore, the Board believes the
disclosure of both the key factors that
adversely affected the consumer’s credit
score and the specific reasons for
denying credit or taking other adverse
action is necessary to fulfill the separate
requirements of the ECOA and the
FCRA.
III. Regulatory Analysis

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A. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C.
3506; 5 CFR part 1320 Appendix A.1),
the Board reviewed the proposed
rulemaking under the authority
delegated to the Board by the Office of
Management and Budget (OMB). The
collection of information that is
required by this proposed rulemaking is
found in 12 CFR 202. In addition, as
permitted by the PRA, the Board also
proposes to extend for three years the
current recordkeeping and disclosure
requirements in connection with
Regulation B. The Board may not
conduct or sponsor, and an organization
is not required to respond to, this
information collection unless it displays
a currently valid OMB control number.
The OMB control number is 7100–0201.

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Section 703(a)(1) of the Equal Credit
Opportunity Act (15 U.S.C. 1691b(a)(1))
authorizes the Board to issue regulations
to carry out the provisions of the Act.
The purpose of the Act is to ensure that
credit is made available to all
creditworthy customers without
discrimination on the basis of race,
color, religion, national origin, sex,
marital status, age (provided the
applicant has the capacity to contract),
receipt of public assistance income, or
the fact that the applicant has in good
faith exercised any right under the
Consumer Credit Protection Act (15
U.S.C. 1600 et seq.). This information
collection is mandatory.
Regulation B applies to all types of
creditors, not just State member banks.
However, under the Paperwork
Reduction Act, the Board accounts for
the burden of the paperwork associated
with the regulation only for entities that
are supervised by the Board. Appendix
A of Regulation B defines these
creditors as State member banks,
branches and agencies of foreign banks
(other than Federal branches, Federal
agencies, and insured state branches of
foreign banks), commercial lending
companies owned or controlled by
foreign banks, and organizations
operating under section 25 or 25A of the
Federal Reserve Act. Other Federal
agencies account for the paperwork
burden for the institutions they
supervise. Creditors are required to
retain records for 12 to 25 months as
evidence of compliance.
The current annual burden to comply
with the provisions of Regulation B is
estimated to be 157,538 hours for the
1,107 institutions 2 supervised by the
Board that are deemed to be
respondents for the purposes of the
PRA.
As discussed above, the Board
proposes to amend model notices C–1
through C–5 to incorporate the
additional content requirements
prescribed by section 1100F of the
Dodd-Frank Act. In addition, the Board
proposes to amend Form C–3 to clarify
the differences between a proprietary
score and a credit score that is obtained
from a consumer reporting agency.
The Board estimates that the proposed
rule would impose a one-time increase
in the total annual burden under
Regulation B. The 1,107 respondents
would take, on average, 16 hours (two
business days) to update their systems
2 The number of Board-supervised respondents
was obtained from numbers published in the Board
of Governors of the Federal Reserve System 96th
Annual Report 2009: 845 State member banks, 204
branches & agencies of foreign banks, three
commercial lending companies, and 55 Edge Act or
agreement corporations.

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to comply with the disclosure
requirements addressed in 12 CFR part
202. This one-time revision would
increase the burden by 17,712 hours.
The Board estimates that, on a
continuing basis, the revision to the rule
would have a negligible effect on the
annual burden. The total annual burden
for the Regulation B information
collection is estimated to increase from
157,538 to 175,250 hours.
Comments are invited on: (1) Whether
the proposed collection of information
is necessary for the proper performance
of the Board’s functions; including
whether the information has practical
utility; (2) the accuracy of the Board’s
estimate of the burden of the proposed
information collection, including the
cost of compliance; (3) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (4)
ways to minimize the burden of
information collection on respondents,
including through the use of automated
collection techniques or other forms of
information technology. Comments on
the collection of information should be
sent to Cynthia Ayouch, Acting Federal
Reserve Clearance Officer, Division of
Research and Statistics, Mail Stop 95–A,
Board of Governors of the Federal
Reserve System, Washington, DC 20551,
with copies of such comments sent to
the Office of Management and Budget,
Paperwork Reduction Project (7100–
0202), Washington, DC 20503.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601 et seq.) requires an agency
either to provide an initial regulatory
flexibility analysis with a proposed rule
or certify that the proposed rule will not
have a significant economic impact on
a substantial number of small entities.
The proposed regulations cover certain
banks, other depository institutions, and
non-bank entities that take adverse
action against consumers. The Small
Business Administration (SBA)
establishes size standards that define
which entities are small businesses for
purposes of the RFA.3 The size standard
to be considered a small business is:
$175 million or less in assets for banks
and other depository institutions; and
$7 million or less in annual revenues for
the majority of non-bank entities that
are likely to be subject to the proposed
regulations. The Board requests public
comment in the following areas.
3 U.S. Small Business Administration, Table of
Small Business Size Standards Matched to North
American Industry Classification System Codes,
available at http://www.sba.gov/idc/groups/public/
documents/sba_homepage/serv_sstd_tablepdf.pdf.

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Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Proposed Rules
1. Reasons for the Proposed Rule
Section 1100F of the Dodd-Frank Act
amends section 615(a) of the FCRA to
require persons to disclose a credit score
and information relating to that credit
score in adverse action notices when the
person uses a credit score in taking
adverse action. Specifically, a person
must disclose, in addition to the
information currently required by
section 615(a) of the FCRA: (1) A
numerical credit score used in making
the credit decision; (2) the range of
possible scores under the model used;
(3) the key factors that adversely
affected the credit score of the consumer
in the model used; (4) the date on which
the credit score was created; and (5) the
name of the person or entity that
provided the credit score. The effective
date of these amendments is July 21,
2011.
Certain model notices in Regulation B
include the content required by both the
ECOA and the FCRA adverse action
provisions, so that creditors can use the
model notices to comply with the
adverse action requirements of both
statutes. The Board is issuing proposed
amendments to the combined ECOA–
FCRA adverse action model notices in
Regulation B pursuant to its existing
authority under section 703(a) of the
ECOA to facilitate compliance with the
new requirements under section 1100F
of the Dodd-Frank Act.
2. Statement of Objectives and Legal
Basis
The SUPPLEMENTARY INFORMATION
above contains this information. The
legal basis for the proposed regulations
is section 703(a) of the ECOA. The
proposed regulations are consistent with
section 1100F of the Dodd-Frank Act.

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3. Description of Small Entities to
Which the Regulation Applies
The proposed regulations apply to
any person that (1) is required to
provide an adverse action notice to a
consumer; and (2) uses a credit score in
making the credit decision requiring an
adverse action notice. The total number
of small entities likely to be affected by
the proposal is unknown because the
Board does not have data on the number
of small entities that use credit scores in
taking adverse action in connection
with consumer credit. The adverse
action provisions of section 1100F of the
Dodd-Frank Act have broad
applicability to persons who use credit
scores in taking adverse action in
connection with the provision of
consumer credit.
Based on estimates compiled by the
Board, the Federal Deposit Insurance

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Corporation, and the Office of Thrift
Supervision, there are approximately
9,585 depository institutions that could
be considered small entities and that are
potentially subject to the proposed
rule.4 The available data are insufficient
to estimate the number of non-bank
entities that would be subject to the
proposed rule and that are small as
defined by the SBA. Such entities
would include non-bank mortgage
lenders, auto finance companies,
automobile dealers, other non-bank
finance companies, insurance
companies, employers, telephone
companies, and utility companies.
It also is unknown how many of these
small entities that meet the SBA’s size
standards and are potentially subject to
the proposed regulations use credit
scores in taking adverse action in
connection with the provision of
consumer credit. The proposed
regulations do not impose any
requirements on small entities that do
not use credit scores in taking adverse
action in connection with consumer
credit.
The Board invites comment regarding
the number and type of small entities
that would be affected by the proposed
rule.
4. Projected Reporting, Recordkeeping
and Other Compliance Requirements
The compliance requirements of the
proposed regulations are described in
detail in the SUPPLEMENTARY
INFORMATION above.
The proposed regulations generally
require a person that is required to
provide an adverse action notice to a
consumer and uses a credit score in
making the credit decision to provide a
credit score and information relating to
that credit score in the notice, in
addition to the information currently
required by section 615(a) of the FCRA.
A person is currently required to
determine if it takes an adverse action,
based in whole or in part on consumer
reports, in connection with the
provision of consumer credit. If the
person does take adverse action based
on consumer reports, the person is
required to establish procedures for
identifying those consumers to whom it
must provide adverse action notices.
A person that is required to provide
adverse action notices to certain
consumers would need to analyze the
regulations. The person would need to
4 The estimate includes 1,504 institutions
regulated by the Board, 673 national banks, and
4,167 Federally-chartered credit unions, as
determined by the Board. The estimate also
includes 2,872 institutions regulated by the FDIC
and 369 thrifts regulated by the OTS. See 75 FR
36016, 36020 (Jun. 24, 2010).

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13899

determine whether it uses credit scores
in taking adverse action against the
consumers to whom it must provide
adverse action notices. Persons that use
credit scores in taking adverse action
would need to provide a credit score
and information relating to that credit
score to those consumers to whom it
must provide an adverse action notice,
in addition to the information currently
required by section 615(a) of the FCRA.
Persons would need to design, generate,
and provide notices, including a credit
score and information relating to that
credit score, to the consumers to whom
it must provide an adverse action
notice.
The Board seeks information and
comment on any costs, compliance
requirements, or changes in operating
procedures arising from the application
of the proposed rule to small
institutions.
5. Identification of Duplicative,
Overlapping, or Conflicting Federal
Regulations
The Board has not identified any
Federal statutes or regulations that
would duplicate, overlap, or conflict
with the proposed regulations. As
discussed in part III above, the proposed
amendments to the adverse action rules
are consistent with section 1100F of the
Dodd-Frank Act. The Board is proposing
the rules pursuant to their existing
authority under section 703(a) of the
ECOA. The proposed amendments to
the adverse action model notices have
been designed to work in conjunction
with the requirements of section 1100F
of the Dodd-Frank Act to help facilitate
uniform compliance when this section
becomes effective. The Board seeks
comment regarding any statutes or
regulations, including State or local
statutes or regulations, that would
duplicate, overlap, or conflict with the
proposed regulations.
6. Discussion of Significant Alternatives
The Board welcomes comments on
any significant alternatives consistent
with section 703(a) of the ECOA and the
provisions of section 1100F of the DoddFrank Act that would minimize the
impact of the proposed regulations on
small entities.
Text of Proposed Revisions
Certain conventions have been used
to highlight the proposed revisions.
New language is shown inside flboldtype arrowsfi while language that
would be deleted is set off with <boldtype angles>.

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List of Subjects in 12 CFR Part 202
Aged, Banks, Banking, Civil Rights,
Consumer protection, Credit,
Discrimination, Federal Reserve System,
Marital Status Discrimination, Penalties,
Religious Discrimination, Reporting and
recordkeeping requirements, Sex
Discrimination.
For the reasons set forth in the
preamble, the Board proposes to amend
12 CFR part 202 and the Official Staff
Commentary, as follows:
PART 202—EQUAL CREDIT
OPPORTUNITY ACT (REGULATION B)
1. The authority citation for part 202
continues to read as follows:
Authority: 15 U.S.C. 1693b.

2. Appendix C to Part 202 is amended
by revising paragraph 2 and Forms
C–1 through C–5 to read as follows:
Appendix C to Part 202—Sample
Notification Forms
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2. Form C–1 contains the Fair Credit
Reporting Act disclosure as required by
sections 615(a) and (b) of that act. Forms C–
2 through C–5 contain only the section 615(a)
disclosure (that a creditor obtained
information from a consumer reporting
agency that <played a part> flwas
consideredfi in the credit decision fland, as
applicable, a credit score used in taking
adverse action along with related
informationfi). A creditor must provide the
section 615(a) disclosure when adverse
action is taken against a consumer based on
information from a consumer reporting
agency. A creditor must provide the section
615(b) disclosure when adverse action is
taken based on information from an outside
source other than a consumer reporting
agency. In addition, a creditor must provide
the section 615(b) disclosure if the creditor
obtained information from an affiliate other
than information in a consumer report or
other than information concerning the
affiliate’s own transactions or experiences
with the consumer. Creditors may comply
with the disclosure requirements for adverse
action based on information in a consumer
report obtained from an affiliate by providing
either the section 615(a) or section 615(b)
disclosure.

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Form C–1—Sample Notice of Action Taken
and Statement of Reasons Statement of Credit
Denial, Termination or Change
Date: llllllllllllllllll
Applicant’s Name: llllllllllll
Applicant’s Address: lllllllllll
Description of Account, Transaction, or
Requested Credit:
lllllllllllllllllllll
lllllllllllllllllllll
Description of Action Taken:
lllllllllllllllllllll
lllllllllllllllllllll

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Part I—Principal Reason(s) for Credit Denial,
Termination, or Other Action Taken
Concerning Credit
This section must be completed in all
instances.
llCredit application incomplete
llInsufficient number of credit references
provided
llUnacceptable type of credit references
provided
llUnable to verify credit references
llTemporary or irregular employment
llUnable to verify employment
llLength of employment
llIncome insufficient for amount of credit
requested
llExcessive obligations in relation to
income
llUnable to verify income
llLength of residence
llTemporary residence
llUnable to verify residence
llNo credit file
llLimited credit experience
llPoor credit performance with us
llDelinquent past or present credit
obligations with others
llCollection action or judgment
llGarnishment or attachment
llForeclosure or repossession
llBankruptcy
llNumber of recent inquiries on credit
bureau report
ll Value or type of collateral not sufficient
llOther, specify:
llllllllll llllllllll
Part II—Disclosure of Use of Information
Obtained From an Outside Source
This section should be completed if the
credit decision was based in whole or in part
on information that has been obtained from
an outside source.
llOur credit decision was based in
whole or in part on information obtained in
a report from the consumer reporting agency
listed below. You have a right under the Fair
Credit Reporting Act to know the information
contained in your credit file at the consumer
reporting agency. The reporting agency
played no part in our decision and is unable
to supply specific reasons why we have
denied credit to you. You also have a right
to a free copy of your report from the
reporting agency, if you request it no later
than 60 days after you receive this notice. In
addition, if you find that any information
contained in the report you receive is
inaccurate or incomplete, you have the right
to dispute the matter with the reporting
agency.
Name: lllllllllllllllll
Address: llllllllllllllll
[Toll-free] Telephone number: llllll
fl[We also obtained your credit score from
this consumer reporting agency and used it
in making our credit decision. Your credit
score is a number that reflects the
information in your credit report. Your credit
score can change, depending on how the
information in your credit report changes.
Your credit score: llllllllllll
Date: llllllllllllllllll
Scores range from a low of llllllll
to a high of lllllllllllllll

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Key factors that adversely affected your
credit score:
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
[Number of recent inquiries on credit
report]]fi
llOur credit decision was based in
whole or in part on information obtained
from an affiliate or from an outside source
other than a consumer reporting agency.
Under the Fair Credit Reporting Act, you
have the right to make a written request, no
later than 60 days after you receive this
notice, for disclosure of the nature of this
information.
If you have any questions regarding this
notice, you should contact:
Creditor’s name: lllllllllllll
Creditor’s address: llllllllllll
Creditor’s telephone number: lllllll
Notice: The Federal Equal Credit
Opportunity Act prohibits creditors from
discriminating against credit applicants on
the basis of race, color, religion, national
origin, sex, marital status, age (provided the
applicant has the capacity to enter into a
binding contract); because all or part of the
applicant’s income derives from any public
assistance program; or because the applicant
has in good faith exercised any right under
the Consumer Credit Protection Act. The
Federal agency that administers compliance
with this law concerning this creditor is
(name and address as specified by the
appropriate agency listed in appendix A).
Form C–2—Sample Notice of Action Taken
and Statement of Reasons
Date
Dear Applicant: Thank you for your recent
application. Your request for [a loan/a credit
card/an increase in your credit limit] was
carefully considered, and we regret that we
are unable to approve your application at this
time, for the following reason(s):
Your Income:
llis below our minimum requirement.
llis insufficient to sustain payments on the
amount of credit requested.
llcould not be verified.
Your Employment:
llis not of sufficient length to qualify.
llcould not be verified.
Your Credit History:
ll of making payments on time was not
satisfactory.
llcould not be verified.
Your Application:
lllacks a sufficient number of credit
references.
lllacks acceptable types of credit
references.
llreveals that current obligations are
excessive in relation to income.
Other: lllllllllllllllll
The consumer reporting agency contacted
that provided information that influenced
our decision in whole or in part was [name,
address and [toll-free] telephone number of
the reporting agency]. The reporting agency
played no part in our decision and is unable
to supply specific reasons why we have
denied credit to you. You have a right under

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Federal Register / Vol. 76, No. 50 / Tuesday, March 15, 2011 / Proposed Rules
the Fair Credit Reporting Act to know the
information contained in your credit file at
the consumer reporting agency. You also
have a right to a free copy of your report from
the reporting agency, if you request it no later
than 60 days after you receive this notice. In
addition, if you find that any information
contained in the report you receive is
inaccurate or incomplete, you have the right
to dispute the matter with the reporting
agency. Any questions regarding such
information should be directed to [consumer
reporting agency]. If you have any questions
regarding this letter, you should contact us at
[creditor’s name, address and telephone
number].
fl[We also obtained your credit score from
this consumer reporting agency and used it
in making our credit decision. Your credit
score is a number that reflects the
information in your credit report. Your credit
score can change, depending on how the
information in your credit report changes.
Your credit score: llllllllllll
Date: llllllllllllllllll
Scores range from a low of llllllll
to a high of lllllllllllllll
Key factors that adversely affected your
credit score:
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
[Number of recent inquiries on credit
report]]fi
Notice: The Federal Equal Credit
Opportunity Act prohibits creditors from
discriminating against credit applicants on
the basis of race, color, religion, national
origin, sex, marital status, age (provided the
applicant has the capacity to enter into a
binding contract); because all or part of the
applicant’s income derives from any public
assistance program; or because the applicant
has in good faith exercised any right under
the Consumer Credit Protection Act. The
Federal agency that administers compliance
with this law concerning this creditor is
(name and address as specified by the
appropriate agency listed in appendix A).
Form C–3—Sample Notice of Action Taken
and Statement of Reasons fl[(Credit
Scoring)]fi
Date
Dear Applicant: Thank you for your recent
application for llllllll. We regret
that we are unable to approve your request.
fl[Reasons for Denial of Credit]fi
Your application was processed by a
fl[ficredit scoringfl]fi system that assigns
a numerical value to the various items of
information we consider in evaluating an
application. These numerical values are
based upon the results of analyses of
repayment histories of large numbers of
customers.
The information you provided in your
application did not score a sufficient number
of points for approval of the application. The
reasons you did not score well compared
with other applicants were:
• Insufficient bank references
• Type of occupation
• Insufficient credit experience

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• Number of recent inquiries on credit
bureau report
fl[Your Right to Get Your Credit Report]fi
In evaluating your application the
consumer reporting agency listed below
provided us with information that in whole
or in part influenced our decision. The
consumer reporting agency played no part in
our decision and is unable to supply specific
reasons why we have denied credit to you.
You have a right under the Fair Credit
Reporting Act to know the information
contained in your credit file at the consumer
reporting agency. It can be obtained by
contacting: [name, address, and [toll-free]
telephone number of the consumer reporting
agency]. You also have a right to a free copy
of your report from the reporting agency, if
you request it no later than 60 days after you
receive this notice. In addition, if you find
that any information contained in the report
you receive is inaccurate or incomplete, you
have the right to dispute the matter with the
reporting agency.
fl[Information about Your Credit Score
We also obtained your credit score from
this consumer reporting agency and used it
in making our credit decision. Your credit
score is a number that reflects the
information in your credit report. Your credit
score can change, depending on how the
information in your credit report changes.
Your credit score: llllllllllll
Date: llllllllllllllllll
Scores range from a low of llllllll
to a high of lllllllllllllll
Key factors that adversely affected your
credit score:
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
[Number of recent inquiries on credit
report]]fi
If you have any questions regarding this
letter, you should contact us at
Creditor’s Name: lllllllllllll
Address: llllllllllllllll
lllllllllllllllllllll
Telephone: lllllllllllllll
Sincerely,
Notice: The Federal Equal Credit
Opportunity Act prohibits creditors from
discriminating against credit applicants on
the basis of race, color, religion, national
origin, sex, marital status, age (with certain
limited exceptions); because all or part of the
applicant’s income derives from any public
assistance program; or because the applicant
has in good faith exercised any right under
the Consumer Credit Protection Act. The
Federal agency that administers compliance
with this law concerning this creditor is
(name and address as specified by the
appropriate agency listed in appendix A).
Form C–4—Sample Notice of Action Taken,
Statement of Reasons and Counteroffer
Date
Dear Applicant: Thank you for your
application for llllllll. We are
unable to offer you credit on the terms that
you requested for the following reason(s):
lllllllllllllllllllll

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13901

We can, however, offer you credit on the
following terms: llllllll
lllllllllllllllllllll
If this offer is acceptable to you, please
notify us within [amount of time] at the
following address: llllllll.
Our credit decision on your application
was based in whole or in part on information
obtained in a report from [name, address and
[toll-free] telephone number of the consumer
reporting agency]. You have a right under the
Fair Credit Reporting Act to know the
information contained in your credit file at
the consumer reporting agency. The reporting
agency played no part in our decision and is
unable to supply specific reasons why we
have denied credit to you. You also have a
right to a free copy of your report from the
reporting agency, if you request it no later
than 60 days after you receive this notice. In
addition, if you find that any information
contained in the report you receive is
inaccurate or incomplete, you have the right
to dispute the matter with the reporting
agency.
fl[We also obtained your credit score from
this consumer reporting agency and used it
in making our credit decision. Your credit
score is a number that reflects the
information in your credit report. Your credit
score can change, depending on how the
information in your credit report changes.
Your credit score: llllllllllll
Date: llllllllllllllllll
Scores range from a low of llllllll
to a high of lllllllllllllll
Key factors that adversely affected your
credit score:
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
[Number of recent inquiries on credit
report]]fi
You should know that the Federal Equal
Credit Opportunity Act prohibits creditors,
such as ourselves, from discriminating
against credit applicants on the basis of their
race, color, religion, national origin, sex,
marital status, age (provided the applicant
has the capacity to enter into a binding
contract), because they receive income from
a public assistance program, or because they
may have exercised their rights under the
Consumer Credit Protection Act. If you
believe there has been discrimination in
handling your application you should
contact the [name and address of the
appropriate Federal enforcement agency
listed in appendix A].
Sincerely,
Form C–5—Sample Disclosure of Right to
Request Specific Reasons for Credit Denial
Date
Dear Applicant: Thank you for applying to
us for llllllll.
After carefully reviewing your application,
we are sorry to advise you that we cannot
[open an account for you/grant a loan to you/
increase your credit limit] at this time. If you
would like a statement of specific reasons
why your application was denied, please
contact [our credit service manager] shown
below within 60 days of the date of this

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letter. We will provide you with the
statement of reasons within 30 days after
receiving your request.
Creditor’s Name lllllllllllll
Address
llllllllllllllll
Telephone Number lllllllllll
If we obtained information from a
consumer reporting agency as part of our
consideration of your application, its name,
address, and [toll-free] telephone number is
shown below. The reporting agency played
no part in our decision and is unable to
supply specific reasons why we have denied
credit to you. [You have a right under the
Fair Credit Reporting Act to know the
information contained in your credit file at
the consumer reporting agency.] You have a
right to a free copy of your report from the
reporting agency, if you request it no later
than 60 days after you receive this notice. In
addition, if you find that any information
contained in the report you received is
inaccurate or incomplete, you have the right
to dispute the matter with the reporting
agency. You can find out about the
information contained in your file (if one was
used) by contacting:
Consumer reporting agency’s name
Address
[Toll-free] Telephone number
fl[We also obtained your credit score from
this consumer reporting agency and used it
in making our credit decision. Your credit
score is a number that reflects the
information in your credit report. Your credit
score can change, depending on how the
information in your credit report changes.
Your credit score: llllllllllll
Date: llllllllllllllllll
Scores range from a low of ________ to a high
of ________
Key factors that adversely affected your
credit score:
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
lllllllllllllllllllll
[Number of recent inquiries on credit
report]]fi
Sincerely,
Notice: The Federal Equal Credit
Opportunity Act prohibits creditors from
discriminating against credit applicants on
the basis of race, color, religion, national
origin, sex, marital status, age (provided the
applicant has the capacity to enter into a
binding contract); because all or part of the
applicant’s income derives from any public
assistance program; or because the applicant
has in good faith exercised any right under
the Consumer Credit Protection Act. The
Federal agency that administers compliance
with this law concerning this creditor is
(name and address as specified by the
appropriate agency listed in appendix A).

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3. Supplement I to part 202 is
amended by revising paragraph 9(b)(2)–
9 to read as follows:
Supplement I to Part 202—Official Staff
Interpretations
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Section 202.9—Notifications

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Paragraph 9(b)(2)

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9. Combined ECOA–FCRA disclosures. The
ECOA requires disclosure of the principal
reasons for denying or taking other adverse
action on an application for an extension of
credit. The Fair Credit Reporting Act (FCRA)
requires a creditor to disclose when it has
based its decision in whole or in part on
information from a source other than the
applicant or its own files. Disclosing that a
credit report was obtained and used in the
denial of the application, as the FCRA
requires, does not satisfy the ECOA
requirement to disclose specific reasons. For
example, if the applicant’s credit history
reveals delinquent credit obligations and the
application is denied for that reason, to
satisfy § 202.9(b)(2) the creditor must
disclose that the application was denied
because of the applicant’s delinquent credit
obligations. flThe FCRA also requires a
creditor to disclose, as applicable, a credit
score it used in taking adverse action along
with related information, including the key
factors that adversely affected the consumer’s
credit score. Disclosing the key factors that
adversely affected the consumer’s credit
score does not satisfy the ECOA requirement
to disclose specific reasons for denying or
taking other adverse action on an application
or extension of credit.fi <To satisfy the
FCRA requirement, the creditor must also
disclose that a credit report was obtained and
used in the denial of the application.>
Sample forms C–1 through C–5 of Appendix
C of the regulation provide for the two
disclosures. See also comment 9(a)(2)–1.

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By order of the Board of Governors of the
Federal Reserve System, March 1, 2011.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2011–5417 Filed 3–14–11; 8:45 am]
BILLING CODE 6210–01–P

FEDERAL RESERVE SYSTEM
12 CFR Part 222
[Regulation V; Docket No. R–1407]
RIN 7100–AD66

FEDERAL TRADE COMMISSION
16 CFR Parts 640 and 698
RIN R411009

Fair Credit Reporting Risk-Based
Pricing Regulations
Board of Governors of the
Federal Reserve System (Board) and
Federal Trade Commission
(Commission).
ACTION: Notice of proposed rulemaking.
AGENCIES:

On January 15, 2010, the
Board and the Commission published

SUMMARY:

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final rules to implement the risk-based
pricing provisions in section 311 of the
Fair and Accurate Credit Transactions
Act of 2003 (FACT Act), which amends
the Fair Credit Reporting Act (FCRA).
The final rules generally require a
creditor to provide a risk-based pricing
notice to a consumer when the creditor
uses a consumer report to grant or
extend credit to the consumer on
material terms that are materially less
favorable than the most favorable terms
available to a substantial proportion of
consumers from or through that
creditor. The Board and the Commission
propose to amend their respective riskbased pricing rules to require disclosure
of credit scores and information relating
to credit scores in risk-based pricing
notices if a credit score of the consumer
is used in setting the material terms of
credit. These proposed amendments
reflect the new requirements in section
615(h) of the FCRA that were added by
section 1100F of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act.
DATES: Comments must be received on
or before April 14, 2011. Comments on
the Paperwork Reduction Act analysis
set forth in Section III.A. of this Federal
Register notice must be received on or
before May 16, 2011.
ADDRESSES: All comments will become
a matter of public record.
Comments should be addressed to:
Board: You may submit comments,
identified by Docket No. R–1407 and
RIN No. RIN 7100–AD66, by any of the
following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments
on the http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• FAX: 202–452–3819 or 202–452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551. All public comments are
available from the Board’s Web site at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons. Accordingly, your comments
will not be edited to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper in Room MP–

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