The Consumer Financial Protection Act (CFPA), approved in July 2010, revises Section 615 of the Fair Credit Reporting Act to state: If any person takes any
adverse action with respect to any consumer that is based on whole or in part on any information contained in a consumer report, the person shall:
• Provide an adverse action notice.
• Provide a score disclosure (including the credit score, the range of the score, four or up to five reason codes if inquiries adversely affected the credit score, the date the score was calculated and the name of the Credit Reporting Agency [CRA]).
• Provide the name, address and phone number of the CRA that furnished the credit report.
• Provide a statement that the CRA did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken.
• Provide notice of the consumers right to obtain a free copy of a consumer report from the CRA within 60 days and notice of the consumers right to dispute with a CRA the accuracy or completeness of any information in a consumer report furnished by the CRA.

So, what does all of this mean to the average layman who has to rely on the CRAs to obtain credit? Simply put,, the Dodd-Frank Wall Street Reform included a place in the new legislation to force the CRAs into supplying credit scores if a credit rating has resulted in an adverse decision. For example if you were applying for a loan to buy an automobile but was denied the loan due to an adverse or negative credit report, you could then ask to see the score that caused the denial. Currently, the consumer can only request the credit report at no cost, but now, the credit score must also be given.

Reported in the news online on April 26, 2011, CRAs are already responding to the new laws. Equifax has just sent out a letter offering a solution to assist its customers with their compliance to the new legislation. Equifaxs solution will be ready by July 21, 2011, the “designated transfer date” on which the Bureau of Consumer Financial Protection will assume powers of various agencies, including the Federal Trade Commission, specified by the CFPA. As part of its new standard solution, Equifax will deliver what it calls a “Fifth factor” in the credit scoring possibilities. The “Fifth factor” relates to the score range and the date the score was calculated for its online and offline generic scoring models.

There are other areas in the credit system that may result in adverse conditions in which this new law will affect you. If you are seeking employment, and an employer turns you down because of your credit rating, you have the right to know you were turned down because of your credit score, and you have the right to know what score was used to turn you down. The same applies to rental property for which you have applied. The rental agency must tell you if you were denied rental because of adverse credit. If so, they must give you the score that caused the denial.

The new legislation strikes one small blow for the individual rights of the consumer. If our lives are going to be so affected by how others rate us, dont we have the right to know? The legislation has been long overdue, but the CFPA doesnt really go far enough in regulating the entire credit industry, at least in the opinion of this writer.

For the past 30 years, we have passed laws favoring creditors and the corporate empires they have built. They built these large business conglomerates on the philosophy of collective thinking, which is the idea we must all work for the benefit of the group. The problem with that thinking is the group is controlled only by a few within their financial models. As a result, we are becoming subservient to the financial desires of a few. Using credit scores to rate the average worker has been one way of controlling the workers. Re-regulating the industry into forcing them to reveal how we are controlled is a start in the right direction. We shouldnt stop there.

Sometimes, adverse credit reports go along with going bankrupt. If you have found yourself in the condition where you have had too many negative reports and need relief from the stress associated with debt, you may need to consult with a bankruptcy lawyer. So, if you live in or around the metropolitan areas of Richmond or Petersburg, Virginia, contact us here today at . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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