Posted by Anthony Demangone
A credit union compliance officer asked me a wonderful question the other day. His credit union wanted to add information to a model risk-based pricing notice, such as the member's name. He was concerned, however, that by tweaking the model form, he might lose safe harbor protection.
When you are using a model form, always look to the regulation to see if it allows some variation to the model form for certain, limited situations. The risk-based pricing notice final rule does allow you to add certain pieces of information to the model forms without blowing up the safe harbor protection. Here's what regulators indicated in the final rule's discussion section:
The Agencies agree that creditors should have some additional flexibility to modify the content of the model forms, while still retaining the safe harbor. Language has been added to the final rules to clarify that technical modifications to the language of the forms are permitted. More examples also have been added to the list of examples of acceptable changes to the model forms: substitution of the words ‘‘credit’’ and ‘‘creditor’’ or ‘‘finance’’ and ‘‘finance company’’ for the terms ‘‘loan’’ and ‘‘lender’’; including pre-printed lists of the sources of consumer reports or consumer reporting agencies in a ‘‘check-the-box’’ format; and including the name of the consumer, transaction identification numbers, a date, and other information that will assist in identifying the transaction to which the form pertains. The final rules also specifically state that unacceptable changes to the model forms include: providing model forms on register receipts or interspersed with other disclosures and eliminating empty lines and extra spaces between sentences within the same section.
A discussion of acceptable changes is found within Appendix H of the final rule.
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