Docu Prep Prepares for Compliance to Final Risk-Based Pricing Rule
The Federal Reserve Board and the Federal Trade Commission announced today the Final Rules, which coincides with the risk-based pricing rule passed six years ago. The Final Rules requires lenders to issue consumers a risk-based pricing notice when, based off the their credit report, the consumer receives less favorable loan terms compared to others. Those who receive this notice will be able to obtain a free credit report to check for accuracy.
Final Rules also allows lenders to provide their consumers with a free credit score and information about their score instead of providing a risk-based pricing notice.
In preparation for the the new Final Rules, Docu Prep will be developing a risk-based pricing notice with alternative language for if the lender desires to provide a free credit report instead, as per the new Rule.
The Final Rules will not be effective until January 1, 2011. Docu Prep is intending to add the disclosure in mid 2010.