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Federal Register / Vol. 86, No. 178 / Friday, September 17, 2021 / Rules and Regulations case of closed-end credit or when the first transaction is made under an openend credit plan.
5 Model form. A model form of the notice described in paragraph f1iii of this section is contained in 16 CFR
part 698, appendix A. Appropriate use of Model Form A5 is deemed to comply with the requirements of 640.5f. Use of the model form is optional.
640.6

Rules of Construction.

For purposes of this part, the following rules of construction apply:
a One notice per credit extension. A
consumer is entitled to no more than one risk-based pricing notice under 640.3a or c, or one notice under 640.5d, e, or f, for each grant, extension, or other provision of credit.
Notwithstanding the foregoing, even if a consumer has previously received a risk-based pricing notice in connection with a grant, extension, or other provision of credit, another risk-based pricing notice is required if the conditions set forth in 640.3d have been met.
b Multi-party transactions1
Initial creditor. The motor vehicle dealer to whom a credit obligation is initially payable must provide the riskbased pricing notice described in 640.3a or c, or satisfy the requirements for and provide the notice required under one of the exceptions in 640.5d, e, or f, even if that motor vehicle dealer immediately assigns the credit agreement to a third party and is not the source of funding for the credit.
2 Purchasers or assignees. A
purchaser or assignee of a credit contract with a consumer is not subject to the requirements of this part and is not required to provide the risk-based pricing notice described in 640.3a or c, or satisfy the requirements for and provide the notice required under one of the exceptions in 640.5d, e, or f.
3 Examples. i A consumer obtains credit to finance the purchase of an automobile. If the motor vehicle dealer is the person to whom the loan obligation is initially payable, such as where the motor vehicle dealer is the original creditor under a retail installment sales contract, the motor vehicle dealer must provide the riskbased pricing notice to the consumer or satisfy the requirements for and provide the notice required under one of the exceptions noted above, even if the motor vehicle dealer immediately assigns the loan to a bank or finance company. The bank or finance company, which is an assignee, has no duty to provide a risk-based pricing notice to the consumer.

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ii A consumer obtains credit to finance the purchase of an automobile.
If a bank or finance company is the person to whom the loan obligation is initially payable, the bank or finance company must provide the risk-based pricing notice to the consumer or satisfy the requirements for and provide the notice required under one of the exceptions noted above based on the terms offered by that bank or finance company only. The motor vehicle dealer has no duty to provide a risk-based pricing notice to the consumer.
However, the bank or finance company may comply with this rule if the motor vehicle dealer has agreed to provide notices to consumers before consummation pursuant to an arrangement with the bank or finance company, as permitted under 640.4c.
c Multiple consumers1 Riskbased pricing notices. In a transaction involving two or more consumers who are granted, extended, or otherwise provided credit, a motor vehicle dealer must provide a notice to each consumer to satisfy the requirements of 640.3a or c. Whether the consumers have the same address or not, the motor vehicle dealer must provide a separate notice to each consumer if a notice includes a credit scores. Each separate notice that includes a credit scores must contain only the credit scores of the consumer to whom the notice is provided, and not the credit scores of the other consumer. If the consumers have the same address, and the notice does not include a credit scores, a motor vehicle dealer may satisfy the requirements by providing a single notice addressed to both consumers.
2 Credit score disclosure notices. In a transaction involving two or more consumers who are granted, extended, or otherwise provided credit, a motor vehicle dealer must provide a separate notice to each consumer to satisfy the exceptions in 640.5d, e, or f.
Whether the consumers have the same address or not, the motor vehicle dealer must provide a separate notice to each consumer. Each separate notice must contain only the credit scores of the consumer to whom the notice is provided, and not the credit scores of the other consumer.
3 Examples. i Two consumers jointly apply for credit with a creditor.
The creditor obtains credit scores on both consumers. Based in part on the credit scores, the creditor grants credit to the consumers on material terms that are materially less favorable than the most favorable terms available to other consumers from the creditor. The creditor provides risk-based pricing notices to satisfy its obligations under
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this subpart. The creditor must provide a separate risk-based pricing notice to each consumer whether the consumers have the same address or not. Each riskbased pricing notice must contain only the credit scores of the consumer to whom the notice is provided.
ii Two consumers jointly apply for credit with a creditor. The two consumers reside at the same address.
The creditor obtains credit scores on each of the two consumer applicants.
The creditor grants credit to the consumers. The creditor provides credit score disclosure notices to satisfy its obligations under this part. Even though the two consumers reside at the same address, the creditor must provide a separate credit score disclosure notice to each of the consumers. Each notice must contain only the credit score of the consumer to whom the notice is provided.
PART 698MODEL FORMS AND
DISCLOSURES
2. The authority citation for part 698
continues to read as follows:

Authority: 12 U.S.C. 5519; 15 U.S.C.
1681mh; 15 U.S.C. 1681s3; Sec. 214b, Pub. L. 108159.

3. Revise appendix A to part 698 to read as follows:

Appendix A to Part 698Model Forms for Risk-Based Pricing and Credit Score Disclosure Exception Notices 1. This appendix contains four model forms for risk-based pricing notices and three model forms for use in connection with the credit score disclosure exceptions. Each of the model forms is designated for use in a particular set of circumstances as indicated by the title of that model form.
2. Model form A1 is for use in complying with the general risk-based pricing notice requirements in 640.3 if a credit score is not used in setting the material terms of credit.
Model form A2 is for risk-based pricing notices given in connection with account review if a credit score is not used in increasing the annual percentage rate. Model form A3 is for use in connection with the credit score disclosure exception for loans secured by residential real property. Model form A4 is for use in connection with the credit score disclosure exception for loans not secured by residential real property.
Model form A5 is for use in connection with the credit score disclosure exception when no credit score is available for a consumer.
Model form A6 is for use in complying with the general risk-based pricing notice requirements in 640.3 if a credit score is used in setting the material terms of credit.
Model form A7 is for risk-based pricing notices given in connection with account review if a credit score is used in increasing the annual percentage rate. All forms contained in this appendix are models; their use is optional.

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