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Dreher Tomkies LLP
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Columbus, Ohio 43215
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MOST PROVISIONS OF FACTA EFFECTIVE DECEMBER 1; BANKING AGENCIES ISSUE INFORMAL GUIDANCE ON TIMING ISSUES

Most provisions of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which substantially amends the Fair Credit Reporting Act (FCRA), are effective December 1, 2004. However, some of the implementing regulations required by the FACTA have yet to be finalized or even proposed. Concerned about the December 1 effective date for certain provisions, several banking trade groups, including, among others, the Consumer Bankers Association, appealed to the federal banking agencies (the Office of Thrift Supervision, Federal Reserve Board (FRB), National Credit Union Administration, Federal Trade Commission (FTC), Federal Deposit Insurance Corporation and Comptroller of the Currency) for guidance regarding the timing of FACTA compliance. Specifically, the trade groups requested that the agencies (i) coordinate a formal announcement clarifying that compliance with FACTA provisions that are subject to agency rule writing will not be required until the compliance date specified in final regulations and (ii) state that they recognize the compliance difficulties posed by the December 1 effective date and that they will take those difficulties into account in considering whether to bring enforcement actions.

The FACTA provisions subject to agency rule writing in (i) above include:

  • Red Flag Guidelines and Regulations (FACTA § 114)
  • Disposal of Consumer Report Information (FACTA § 216)
  • Accuracy and Integrity Guidelines and Regulations (FACTA § 12(a))
  • Ability of Consumer to Dispute Information with Furnisher (FACTA § 312(c))
  • Reconciling Addresses (FACTA § 315)
  • Risk-Based Pricing Notice (FACTA § 311)

In a letter dated November 24, 2004, the agencies responded that with respect to the provisions in the first five bullet points, compliance cannot be determined until implementing regulations are finally adopted; the effective dates for those provisions will be set forth in the regulations. With respect to the final bullet point, the letter explained that FACTA Section 311 becomes effective December 1 and joint rulemaking by the FTC and FRB will establish the parameters for compliance and state the date for compliance. The trade groups also identified four provisions that do not involve agency rule writing but that they believe may be difficult or impossible to implement by December 1, including:

  • Fraud and Active Duty Alerts (FACTA § 112)
  • Blocking of Information Resulting from Identity Theft (FACTA § 152)
  • Prevention of Repollution of Consumer Reports (FACTA §§ 154(a)-(b))
  • Credit Score Disclosures (FACTA § 212(c))

The agencies stated that although they expect covered persons to begin to comply with these provisions on December 1, they appreciated the difficulties associated implementing new requirements and they would take those difficulties together with all other relevant circumstances, including good faith efforts to comply, into account when considering whether to bring enforcement actions.􀂉

􀂗 Margaret Stolar