Q For purposes of complying with the risk-based pricing notices of Regulation V (Fair Credit Reporting Act), my bank uses the exception notice for its auto loans and boat loans. May that disclosure be provided with the closing package provided at consummation?
A It may, but only if it is not “reasonably practicable” to provide it earlier. The credit score exception notice permitted under §1022.74 (e)(3) must be provided to the consumer as soon “as reasonably practicable after requesting the consumer’s credit score but not later than consummation for closed-end credit or when the first transaction is made for open-end credit.” Thus, the basic requirement is that it be provided as soon as reasonably practicable, but after consummation is too late, even if that is “as soon as reasonably practicable.”
In the case of a boat or auto loan, especially if the loan is made quickly, it may not be “reasonably practicable” to provide the credit score prior to loan closing.
The same timing requirement applies to loans secured by residential real estate under §1022.74 (e)(3). However, given the typical length of time between mortgage loan application and consummation and the documents that must be provided prior to consummation, it is arguable that the notice should be provided prior to consummation.
For more information, contact ABA’s Leslie Callaway. Please note that this section is not a substitute for professional legal advice.
