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Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Rules and Regulations
described in 640.3a, 640.5e, or 640.5f to the consumer on its behalf within the time periods set forth in paragraph c1i of this section, 640.5e3, or 640.5f4, as applicable, and maintains reasonable policies and procedures to verify the motor vehicle dealer or other party provides such notice to the consumer within the applicable time periods. If the person arranges to have the motor vehicle dealer or other party provide a notice described in 640.5e, the persons obligation is satisfied if the consumer receives a notice containing a credit score obtained by the dealer or other party, even if a different credit score is obtained and used by the person on whose behalf the notice is provided.
3 Timing requirements for contemporaneous purchase credit.
When credit under an open-end credit plan is granted, extended, or provided to a consumer in person or by telephone for the purpose of financing the contemporaneous purchase of goods or services, any risk-based pricing notice required to be provided pursuant to this part or the disclosures permitted under 640.5e or f may be provided at the earlier of:
i The time of the first mailing by the motor vehicle dealer to the consumer after the decision is made to approve the grant, extension, or other provision of open-end credit, such as in a mailing containing the account agreement or a credit card; or ii Within 30 days after the decision to approve the grant, extension, or other provision of credit.
d Multiple credit scores1 In general. When a motor vehicle dealer obtains or creates two or more credit scores and uses one of those credit scores in setting the material terms of credit, for example, by using the low, middle, high, or most recent score, the notices described in paragraphs a1
and 2 of this section must include that credit score and information relating to that credit score required by paragraphs a1ix and a2ix of this section.
When a motor vehicle dealer obtains or creates two or more credit scores and uses multiple credit scores in setting the material terms of credit by, for example, computing the average of all the credit scores obtained or created, the notices described in paragraphs a1 and 2 of this section must include one of those credit scores and information relating to credit scores required by paragraphs a1ix and a2ix of this section.
The notice may, at the motor vehicle dealers option, include more than one credit score, along with the additional information specified in paragraphs
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a1ix and a2ix of this section for each credit score disclosed.
2 Examples. i A motor vehicle dealer that uses consumer reports to set the material terms of automobile loans granted, extended, or provided to consumers regularly requests credit scores from several consumer reporting agencies and uses the low score when determining the material terms it will offer to the consumer. That motor vehicle dealer must disclose the low score in the notices described in paragraphs a1 and 2 of this section.
ii A motor vehicle dealer that uses consumer reports to set the material terms of automobile loans granted, extended, or provided to consumers regularly requests credit scores from several consumer reporting agencies, each of which it uses in an underwriting program in order to determine the material terms it will offer to the consumer. That motor vehicle dealer may choose one of these scores to include in the notices described in paragraph a1 and 2 of this section.
640.5

Exceptions.

a Application for specific terms1
In general. A motor vehicle dealer is not required to provide a risk-based pricing notice to the consumer under 640.3a or c if the consumer applies for specific material terms and is granted those terms, unless those terms were specified by the motor vehicle dealer using a consumer report after the consumer applied for or requested credit and after the motor vehicle dealer obtained the consumer report. For purposes of this section, specific material terms means a single material term, or set of material terms, such as an annual percentage rate of 10 percent, and not a range of alternatives, such as an annual percentage rate that may be 8, 10, or 12 percent, or between 8 and 12 percent.
2 Example. A consumer receives a firm offer of credit from a motor vehicle dealer. The terms of the firm offer are based in whole or in part on information from a consumer report the motor vehicle dealer obtained under the FCRAs firm offer of credit provisions.
The solicitation offers the consumer a loan with an annual percentage rate of 12 percent. The consumer applies for and receives a loan with an annual percentage rate of 12 percent. Other customers of the motor vehicle dealer have an annual percentage rate of 10
percent. The exception applies because the consumer applied for specific material terms and was granted those terms. Although the motor vehicle dealer specified the annual percentage rate in the firm offer of credit based in
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whole or in part on a consumer report, the motor vehicle dealer specified that material term before, not after, the consumer applied for or requested credit.
b Adverse action notice. A motor vehicle dealer is not required to provide a risk-based pricing notice to the consumer under 640.3a, c, or d if the motor vehicle dealer provides an adverse action notice to the consumer under section 615a of the FCRA.
c Prescreened solicitations1 In general. A motor vehicle dealer is not required to provide a risk-based pricing notice to the consumer under 640.3a or c if the motor vehicle dealer:
i Obtains a consumer report that is a prescreened list as described in section 604c2 of the FCRA; and ii Uses the consumer report for the purpose of making a firm offer of credit to the consumer.
2 More favorable material terms.
This exception applies to any firm offer of credit offered by a motor vehicle dealer to a consumer, even if the motor vehicle dealer makes other firm offers of credit to other consumers on more favorable material terms.
3 Example. A motor vehicle dealer obtains two prescreened lists from a consumer reporting agency. One list includes consumers with high credit scores. The other list includes consumers with low credit scores. The motor vehicle dealer mails a firm offer of credit to the high credit score consumers with an annual percentage rate of 10 percent. The motor vehicle dealer also mails a firm offer of credit to the low credit score consumers with an annual percentage rate of 14 percent.
The motor vehicle dealer is not required to provide a risk-based pricing notice to the low credit score consumers who receive the 14 percent offer because use of a consumer report to make a firm offer of credit does not trigger the riskbased pricing notice requirement.
d Loans secured by residential real propertycredit score disclosure1 In general. A motor vehicle dealer is not required to provide a risk-based pricing notice to a consumer under 640.3a or c if:
i The consumer requests from the motor vehicle dealer an extension of credit that is or will be secured by one to four units of residential real property;
and ii The motor vehicle dealer provides to each consumer described in paragraph d1i of this section a notice that contains the following A A statement that a consumer report or credit report is a record of the consumers credit history and includes information about whether the
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