Compliance Q&A: FACT Act

FACT Act risk-based pricing regulations go into effect on Jan. 1.

October 26, 2010

Q What are the timing rules for the Fair and Accurate Credit Transactions (FACT) Act risk-based pricing regulations that go into effect on Jan. 1, 2011?



A The credit union generally must provide the notice before the consummation of the transaction (meaning after the terms have been set but before the member becomes contractually obligated on the loan), or before the first transaction for credit cards or other open-end credit, but no earlier than the time that approval decision is communicated to the member.

For account reviews, credit unions must provide the notice at the time that the decision to increase the annual percentage rate is communicated to the member, but no later than five days after the effective date of the change if the credit union doesn’t provide prior notice of the increase (to the extent that the law permits).