Agencies Tighten Consumer Disclosure Requirement

Effective Jan. 1, 2011, lenders must notify consumers when credit or a loan is granted on “materially less favorable” terms based on a credit report, under draft final rules released by the Federal Trade Commission and the Federal Reserve Board Dec. 22. In identical statements, the Fed and the FTC said a notice is required when consumers are offered credit or loans on terms that are “materially less favorable than the most favorable terms available to a substantial proportion of consumers” when that decision is based on information from the consumer’s credit report.

The draft final rules would implement the ...