Over the years, I have been asked many times if it is permissible to combine an adverse action notice with an FCRA notice like the risk-based pricing notice. Basically, these notices (the adverse action notice and the risk-based pricing notice or credit score disclosure exception notice) have similar information. For example, they each require the disclosure of things like the applicant’s credit score, the range of possible scores, the date of the credit score, the key factors that affected the score and who to contact with questions. Because of this, some lenders would prefer to just attach the risk-based pricing notice (or exception notice) to the adverse action notice and not complete the information twice.
So, can a lender just attach the risk-based pricing notice to the adverse action notice?
You would think this would be a logical option, but unfortunately, it is not permitted. Specifically, the pre-amble to the final rule states the following:
Per the pre-amble:
“Some industry commenters asked the Board to clarify that if a creditor provides a credit score exception notices or section 609 notices to consumer, the creditor would not be required to include the disclosures required by section 1100F of the Dodd-Frank Act in the adverse action notice. One industry commenter also requested that the Board clarify that a creditor is allowed to combine the section 609(g) notice with an adverse action notice. For the reasons discussed below, the Board does not believe a creditor would comply with the FCRA adverse action provisions in section 1100F by providing a credit score disclosure exception notice or section 609(g) notice. In addition, the Board does not believe that the 609(g) notice may be integrated into a FCRA adverse action notice. “
In addition, the pre-amble expands on this:
“The Board does not believe a creditor would comply with the FCRA adverse action provisions by providing a credit score disclosure exception notice or section 609(g) notice. These notices provide different information and have different timing requirements than the adverse action notice. In addition, the credit score disclosed on the credit score disclosure exception notice or section 609(g) notice might not be the credit score used in taking adverse action. For example, for purposes of the credit score disclosure exception notice, if a person uses a credit score that was not created by a consumer reporting agency, such as a proprietary score, that person is permitted to disclose either the proprietary score or a credit score it obtained from an entity regularly engaged in the business of selling credit scores, even if the latter credit score was not used in the credit decision. Nonetheless, in that circumstance, the FCRA adverse action notice must contain the proprietary score under 1100F. As discussed above, if a creditor uses a proprietary “credit” score in taking adverse action and does not use a credit score from a consumer reporting agency, the creditor must disclose information about the proprietary score under section 1100F.”
“Combined Notices. One industry commenter requested that the Board clarify that a creditor is allowed to combine the section 609(g) notice with the FCRA adverse action notice. The Board does not believe a creditor would comply with the FCRA adverse action provisions by combining the section 609(g) notice with an adverse action notice for the reasons discussed above. In addition, the Board believes that allowing the section 609(g) notice to be combined with the adverse action notice might distract consumers from the primary purposes of the adverse action notice, which is to notify the consumer that adverse action has been taken. "
Furthermore, goes on to state the following:
"Disclosing credit score information on a separate document. Several industry commenters requested a model form that consumer reporting agencies could use to provide creditors the credit score information needed for adverse action notices under section 1100F of the Dodd-Frank Act. These commenters asked that creditors be permitted to attach the consumer reporting agency’s form to their adverse action notices, and provide both documents to the consumer. These commenters did not believe that the creditor should be required to integrate the credit score information into its adverse action notice. Section 615(a)(1) of the FCRA requires a creditor to provide notice of adverse action to consumers against whom it takes adverse action based in whole or in part on information contained in a consumer report. Section 1100F of the Dodd-Frank Act amended Section 615(a) to require a creditor to provide such consumers credit score information. Providing a form with credit score information separately from an adverse action notice does not appear to be consistent with the legislation."
So, as you can see, each Adverse Action notice must contain the required FCRA information.