Higher Rates Will Require Lender Explanation
Under new rules from the Federal Reserve Board and the Federal Trade Commission, borrowers who are loaned money at less-favorable rates because of their credit ratings must be notified and given a free copy of their credit scores.
Currently, lenders don’t have to offer any explanations. These rules apply to mortgage lenders as well as other sorts of financing firms. It takes effect Jan.1, 2011.
Consumers who are given terms “materially less favorable” than “a substantial proportion” of the lenders’ other customers must receive the information, according to the report in the federal register.
Source: Bloomberg, Jeff Plungis (12/22/2009)