FDIC Header Test Skip Header

Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

FDIC Law, Regulations, Related Acts

[Table of Contents] [Previous Page] [Next Page] [Search]

2000 - Rules and Regulations



ART 334—FAIR CREDIT REPORTING

Subpart A—General Provisions

Sec.

334.1 Purpose and scope
334.2 Examples.
334.3 Definitions

Subpart B—H [Reserved]

Subpart I—Records Disposal

334.80—334.82   [Reserved]
334.83 Disposal of consumer information.

Subpart J—Identity Theft Red Flags

334.90 Duties regarding the detection, prevention, and mitigation of identity theft.
334.91 Duties of card issuers regarding changes of address.

Appendix A–B [Reserved]

Appendix C to Part 334—Model Forms for Opt-Out Notices.

Appendix D [Reserved]

Appendix E to Part 334—Interagency Guidelines Concering the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies.

Appendix F–I [Reserved]

Appendix J to Part 334—Interagency Guidelines on Identity Theft Detection Prevention and Mitigation.

AUTHORITY:  12 U.S.C. 1818 1819(Tenth) and 1831p--1; 15 U.S.C. 1681a, 1681b, 1681c, 1681m, 1681s, 1681s--3, 1681t, 1681w, 6801 and 6805, Pub. L. 108--159, 117 Stat. 1952.

SOURCE:  The provisions of this Part 334 appear at 69 Fed. Reg. 77618, December 28, 2004, effective July 1, 2005, and 70 Fed. Reg. 70685, November 22, 2005, effective date of the interim final rule published on June 10, 2005 (70 FR 33958) is delayed until April 1, 2006, the amendments in this final rule are effective April 1, 2006 except as otherwise noted.

Subpart A—General Provisions

§ 334.1  Purpose and scope.

(a)  Purpose. The purpose of this part is to implement the Fair Credit Reporting Act.

(b)  Scope. Except as otherwise provided in this part, the regulations in this part apply to insured state nonmember banks, state savings associations whose deposits are insured by the Federal Deposit Insurance Corporation, insured state licensed branches of foreign banks, and subsidiaries of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers).

[Codified to 12, C.F.R. § 334.1]

[Section 334.1 added at 72 Fed. Reg. 62963, November 7, 2007, effective January 1, 2008, mandatory compliance date is October 1, 2008; 80 Fed. Reg. 69518, October 28, 2015, effective November 27, 2015]

§ 334.2  Examples.

The examples in this part are not exclusive. Compliance with an example, to the extent applicable, constitutes compliance with this part. Examples in a paragraph illustrate only the issue described in the paragraph and do not illustrate any other issue that may arise in this part.

§ 334.3  Definitions.

For purposes of this part, unless explicitly stated otherwise:

(a)  Act means the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.).

(b)  Affiliate means any company that is related by common ownership or common corporate control with another company.

(c)  [Reserved]

(d)  Company means any corporation, limited liability company, business trust, general or limited partnership, association, or similar organization.

(e)  Consumer means an individual.

(f)  [Reserved]

(g)  [Reserved]

(h)  [Reserved]

(i)  Common ownership or common corporate control means a relationship between two companies under which:

(1)  One company has, with respect to the other company:

(i)  Ownership, control, or power to vote 25 percent or more of the outstanding shares of any class of voting security of a company, directly or indirectly, or acting through one or more other persons;

(ii)  Control in any manner over the election of a majority of the directors, trustees, or general partners (or individuals exercising similar functions) of a company; or

(iii)  The power to exercise, directly or indirectly, a controlling influence over the management or policies of a company, as the FDIC determines; or

(2)  Any other person has, with respect to both companies, a relationship described in paragraphs (i)(1)(i)--(i)(1)(iii) of this section.

(j)  [Reserved]

(k)  Medical information means:

(1)  Information or data, whether oral or recorded, in any form or medium, created by or derived from a health care provider or the consumer, that relates to--

(i)  The past, present, or future physical, mental, or behavioral health or condition of an individual;

(ii)  The provision of health care to an individual; or

(iii)  The payment for the provision of health care to an individual.

(2)  The term does not include:

(i)  The age or gender of a consumer;

(ii)  Demographic information about the consumer, including a consumer's residence address or e-mail address;

(iii)  Any other information about a consumer that does not relate to the physical, mental, or behavioral health or condition of a consumer, including the existence or value of any insurance policy; or

(iv)  Information that does not identify a specific consumer.

(l)  Person means any individual, partnership, corporation, trust, estate cooperative, association, government or governmental subdivision or agency, or other entity.

(m)  State savings association has the same meaning as in 3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).

[Codified to 12 C.F.R. § 334.3]

[Section 334.3 amended at 72 Fed. Reg. 63760, November 9, 2007, effective January 1, 2008, the mandatory compliance date is November 1, 2008; 80 Fed. Reg. 65919, October 28, 2015, effective November 27, 2015]

Subpart B—H [Reserved]

Subpart I—Records Disposal

§ 334.80–334.82 [Reserved] {hang}§ 334.83  Disposal of consumer information.

(a)  In general. You must properly dispose of any consumer information that you maintain or otherwise possess in accordance with the Interagency Guidelines Establishing Information Security Standards, as set forth in appendix B to part 364 of this chapter, prescribed pursuant to section 216 of the Fair and Accurate Credit Transactions Act of 2003 (15 U.S.C. 1681w) and section 501(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 6801(b)), to the extent the Guidelines are applicable to you.

(b)  Rule of construction. Nothing in this section shall be construed to:

(1)  Require you to maintain or destroy any record pertaining to a consumer that is not imposed under any other law; or

(2)  Alter or affect any requirement imposed under any other provision of law to maintain or destroy such a record.

[Codified to 12 C.F.R. § 334.83]

Subpart J—Identity Theft Red Flags

§ 334.90  Duties regarding the detection, prevention, and mitigation of identity theft.

(a)  Scope. This section applies to a financial institution or creditor that is an insured state nonmember bank, State savings association whose deposits are insured by the Federal Deposit Insurance Corporation, insured state licensed branch of a foreign bank, or a subsidiary of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers).

(b)  Definitions. For purposes of this section and Appendix J, the following definitions apply:

(1)  Account means a continuing relationship established by a person with a financial institution or creditor to obtain a product or service for personal, family, household or business purposes. Account includes:

(i)  An extension of credit, such as the purchase of property or services involving a deferred payment; and

(ii)  A deposit account.

(2)  The term board of directors includes:

(i)  In the case of a branch or agency of a foreign bank, the managing official in charge of the branch or agency; and

(ii)  In the case of any other creditor that does not have a board of directors, a designated employee at the level of senior management.

(3)  Covered account means:

(i)  An account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, such as a credit card account, mortgage loan, automobile loan, margin account, cell phone account, utility account, checking account, or savings account; and

(ii)  Any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.

(4)  Credit has the same meaning as in 15 U.S.C. 1681a(r)(5).

(5)  Creditor has the same meaning as in 15 U.S.C. 1681m(e)(4)

(6)  Customer means a person that has a covered account with a financial institution or creditor.

(7)  Financial institution has the same meaning as in 15 U.S.C. 1681a(t).

(8)  Identity theft has the same meaning as in 16 CFR 603.2(a).

(9)  Red Flag means a pattern, practice, or specific activity that indicates the possible existence of identity theft.

(10)  Service provider means a person that provides a service directly to the financial institution or creditor.

(11)  State savings association has the same meanings as in section 3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).

(c)  Periodic Identification of Covered Accounts. Each financial institution or creditor must periodically determine whether it offers or maintains covered accounts. As a part of this determination, a financial institution or creditor must conduct a risk assessment to determine whether it offers or maintains covered accounts described in paragraph (b)(3)(ii) of this section, taking into consideration:

(1)  The methods it provides to open its accounts;

(2)  The methods it provides to access its accounts; and

(3)  Its previous experiences with identity theft.

(d)  Establishment of an Identity Theft Prevention Program--(1)  Program requirement. Each financial institution or creditor that offers or maintains one or more covered accounts must develop and implement a written Identity Theft Prevention Program (Program) that is designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account. The Program must be appropriate to the size and complexity of the financial institution or creditor and the nature and scope of its activities.

(2)  Elements of the Program. The Program must include reasonable policies and procedures to:

(i)  Identify relevant Red Flags for the covered accounts that the financial institution or creditor offers or maintains, and incorporate those Red Flags into its Program;

(ii)  Detect Red Flags that have been incorporated into the Program of the financial institution or creditor;

(iii)  Respond appropriately to any Red Flags that are detected pursuant to paragraph (d)(2)(ii) of this section to prevent and mitigate identity theft; and

(iv)  Ensure the Program (including the Red Flags determined to be relevant) is updated periodically, to reflect changes in risks to customers and to the safety and soundness of the financial institution or creditor from identity theft.

(e)  Administration of the Program. Each financial institution or creditor that is required to implement a Program must provide for the continued administration of the Program and must:

(1)  Obtain approval of the initial written Program from either its board of directors or an appropriate committee of the board of directors;

(2)  Involve the board of directors, an appropriate committee thereof, or a designated employee at the level of senior management in the oversight, development, implementation and administration of the Program;

(3)  Train staff, as necessary, to effectively implement the Program; and

(4)  Exercise appropriate and effective oversight of service provider arrangements.

(f)  Guidelines. Each financial institution or creditor that is required to implement a Program must consider the guidelines in Appendix J of this part and include in its Program those guidelines that are appropriate.

[Codified to 12 C.F.R. § 334.90]

[Section 334.90 added at 72 Fed. Reg. 63761, November 9, 2007, effective January 1, 2008; 80 Fed. Reg. 65919, October 28, 2015, effective November 27, 2015]

§ 334.91  Duties of card issuers regarding changes of address.

(a)  Scope. This section applies to an issuer of a debit or credit card (card issuer) that is an insured state nonmember bank, state savings association whose deposits are insured by the Federal Deposit Insurance Corporation, insured state licensed branch of a foreign bank, or a subsidiary of such entities (except brokers, dealers, persons providing insurance, investment companies, or investment advisers).

(b)  Definitions. For purposes of this section:

(1)  Cardholder means a consumer who has been issued a credit or debit card.

(2)  Clear and conspicuous means reasonably understandable and designed to call attention to the nature and significance of the information presented.

(3)  State savings association has the same meaning as in section 3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).

(c)  Address validation requirements. A card issuer must establish and implement reasonable policies and procedures to assess the validity of a change of address if it receives notification of a change of address for a consumer's debit or credit card account and, within a short period of time afterwards (during at least the first 30 days after it receives such notification), the card issuer receives a request for an additional or replacement card for the same account. Under these circumstances, the card issuer may not issue an additional or replacement card, until, in accordance with its reasonable policies and procedures and for the purpose of assessing the validity of the change of address, the card issuer:

(1)(i)  Notifies the cardholder of the request:

(A)  At the cardholder's former address; or

(B)  By any other means of communication that the card issuer and the cardholder have previously agreed to use; and

(ii)  Provides to the cardholder a reasonable means of promptly reporting incorrect address changes; or

(2)  Otherwise assesses the validity of the change of address in accordance with the policies and procedures the card issuer has established pursuant to § 334.90 of this part.

(3)  State savings association has the same meaning as in section 3(b)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(b)(3).

(d)  Alternative timing of address validation. A card issuer may satisfy the requirements of paragraph (c) of this section if it validates an address pursuant to the methods in paragraph (c)(1) or (c)(2) of this section when it receives an address change notification, before it receives a request for an additional or replacement card.

(e)  Form of notice. Any written or electronic notice that the card issuer provides under this paragraph must be clear and conspicuous and provided separately from its regular correspondence with the cardholder.

[Codified to 12 C.F.R. § 334.91]

[Section 334.91 added at 72 Fed. Reg. 63761, November 9, 2007, effective January 1, 2008; 80 Fed. Reg. 65919, October 28, 2015, effective November 27, 2015]

Appendix A–B—[Reserved]

Appendix C To Part 334--Model Forms for Opt-Out Notices

a.  Although use of the model forms is not required, use of the model forms in this Appendix (as applicable) complies with the requirement in section 624 of the Act for clear, conspicuous, and concise notices.

b.  Certain changes may be made to the language or format of the model forms without losing the protection from liability afforded by use of the model forms. These changes may not be so extensive as to affect the substance, clarity, or meaningful sequence of the language in the model forms. Persons making such extensive revisions will lose the safe harbor that this Appendix provides. Acceptable changes include, for example:

1.  Rearranging the order of the references to "your income," "your account history," and "your credit score."

2.  Substituting other types of information for "income," "account history," or "credit score" for accuracy, such as "payment history," "credit history," "payoff status," or "claims history."

3.  Substituting a clearer and more accurate description of the affiliates providing or covered by the notice for phrases such as "the [ABC] group of companies," including without limitation a statement that the entity providing the notice recently purchased the consumer's account.

4.  Substituting other types of affiliates covered by the notice for "credit card," "insurance," or "securities" affiliates.

5.  Omitting items that are not accurate or applicable. For example, if a person does not limit the duration of the opt-out period, the notice may omit information about the renewal notice.

6.  Adding a statement informing consumers how much time they have to opt out before shared eligibility information may be used to make solicitations to them.

7.  Adding a statement that the consumer may exercise the right to opt out at any time.

8.  Adding the following statement, if accurate; "If you previously opted out, you do not need to do so again."

9.  Providing a place on the form for the consumer to fill in identifying information, such as his or her name and address:

10.  Adding disclosures regarding the treatment of opt-outs by joint consumers to comply with § 334.23(a)(2) of this part.

C--1  Model Form for Initial Opt-out Notice (Single-Affiliate Notice) C--2  Model Form for Initial Opt-out Notice (Joint Notice) C--3  Model Form for Renewal Notice (Single-Affiliate Notice) C--4  Model Form for Renewal Notice (Joint Notice) C--5  Model Form for Voluntary "No Marketing" Notice

C–1—Model Form for Initial Opt-out Notice (Single-Affiliate Notice)—[Your Choice To Limit Marketing]/[Marketing Opt-out]

•  [Name of Affiliate] is providing this notice.

•  [Optional: Federal law gives you the right to limit some but not all marketing from our affiliates. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from our affiliates.]

•  You may limit our affiliates in the [ABC] group of companies, such as our [credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that we collect and share with them. This information includes your [income], your [account history with us], and your [credit score].

•  Your choice to limit marketing offers from our affiliates will apply [until you tell us to change your choice]/[for x years from when you tell us your choice]/[for at least 5 years from when you tell us your choice]. [Include if the opt-out period expires.] Once that period expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from our affiliates for [another x years]/[at least another 5 years].

•  [Include, if applicable, in a subsequent notice, including an annual notice, for consumers who may have previously opted out.] If you have already made a choice to limit marketing offers from our affiliates, you do not need to act again until you receive the renewal notice.

To limit marketing offers, contact us [include all that apply]:

•  By telephone: 1--877--###--####

•  On the Web: www.---.com

•  By mail: Check the box and complete the form below, and send the form to:

[Company name] [Company address]

_______ Do not allow your affiliates to use my personal information to market to me.

C–2—Model Form for Initial Opt-out Notice (Joint Notice)—[Your Choice To Limit Marketing]/[Marketing Opt-out]

•  The [ABC group of companies] is providing this notice.

•  [Optional: Federal law gives you the right to limit some but not all marketing from the [ABC] companies. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from the [ABC] companies.]

•  You may limit the [ABC] companies, such as the [ABC credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that they receive from other [ABC] companies. This information includes your [income], your [account history], and your [credit score].

•  Your choice to limit marketing offers from the [ABC] companies will apply [until you tell us to change your choice]/[for x years from when you tell us your choice]/[for at least 5 years from when you tell us your choice]. [Include if the opt-out period expires.] Once that period expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from the [ABC] companies for [another x years]/[at least another 5 years].

•  [Include, if applicable, in a subsequent notice, including an annual notice, for consumers who may have previously opted out.] If you have already made a choice to limit marketing offers from the [ABC] companies, you do not need to act again until you receive the renewal notice.

To limit marketing offers, contact us [include all that apply]:

•  By telephone: 1--877--###--####

•  On the Web: www.---.com

•  By mail: Check the box and complete the form below, and send the form to:

[Company name] [Company address]

_______ Do not allow any company [in the ABC group of companies] to use my personal information to market to me.

C–3—Model Form for Renewal Notice (Single-Affiliate Notice)—[Renewing Your Choice To Limit Marketing]/[Renewing Your Marketing Opt-out]

•  [Name of Affiliate] is providing this notice.

•  [Optional: Federal law gives you the right to limit some but not all marketing from our affiliates. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from our affiliates.]

•  You previously chose to limit our affiliates in the [ABC] group of companies, such as our [credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that we share with them. This information includes your [income], your [account history with us], and your [credit score].

•  Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us [include all that apply]:

•  By telephone: 1--877--###--####

•  On the Web: www.---.com

•  By mail: Check the box and complete the form below, and send the form to:

[Company name] [Company address]

_______ Renew my choice to limit marketing for [x] more years.

C–4—Model Form for Renewal Notice (Joint Notice)—[Renewing Your Choice To Limit Marketing]/[Renewing Your Marketing Opt-out]

•  The [ABC group of companies] is providing this notice.

•  [Optional: Federal law gives you the right to limit some but not all marketing from the [ABC] companies. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from the [ABC] companies.]

•  You previously chose to limit the [ABC] companies, such as the [ABC credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that they receive from other ABC companies. This information includes your [income], your [account history], and your [credit score].

•  Your choice has expired or is about to expire.

To renew your choice to limit marketing for [x] more years, contact us [include all that apply];

•  By telephone: 1--877--###--####

•  On the Web: www.---.com

•  By mail: Check the box and complete the form below, and send the form to:

[Company name] [Company address]

_______ Renew my choice to limit marketing for [x] more years.

C–5—Model Form for Voluntary ``No Marketing'' Notice

Your Choice To Stop Marketing

•  [Name of Affiliate] is providing this notice.

•  You may choose to stop all marketing from us and our affiliates.

•  [Your choice to stop marketing from us and our affiliates will apply until you tell us to change your choice.]

To stop all marketing, contact us [include all that apply]:

•  By telephone: 1--877--###--####

•  On the Web: www.---.com

•  By mail: Check the box and complete the form below, and send the form to:

[Company name] [Company address]

_______ Do not market to me.

[Codified to 12 C.F.R. Part 334, Appendix C]

[Appendix C added at 72 Fed. Reg. 62971, November 7, 2007, effective January 1, 2008, the mandatory compliance date is October 1, 2008; 74 Fed. Reg. 22643, May 14, 2009, effective May 14, 2009, except for amendments in instructions 4, 10, 15, 20, 26, and 34 relating to apendecies C to 12 CFR parts 41, 222, 334, 571, 717 and 16 CFR part 698, respectively, which are effective January 1, 2010]

Appendix D to Part 334—[Reserved]

Appendix E to Part 334—Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies

The FDIC encourages voluntary furnishing of information to consumer reporting agencies. Section 334.42 of this part requires each furnisher to establish and implement reasonable written policies and procedures concerning the accuracy and integrity of the information it furnishes to consumer reporting agencies. Under § 334.42(b), a furnisher must consider the guidelines set forth below in developing its policies and procedures. In establishing these policies and procedures, a furnisher may include any of its existing policies and procedures that are relevant and appropriate. Section 334.42(c) requires each furnisher to review its policies and procedures periodically and update them as necessary to ensure their continued effectiveness.

I.  Nature, Scope, and Objectives of Policies and Procedures

(a)  Nature and Scope. Section 334.42(a) of this part requires that a furnisher's policies and procedures be appropriate to the nature, size, complexity, and scope of the furnisher's activities. In developing its policies and procedures, a furnisher should consider, for example:

(1)  The types of business activities in which the furnisher engages;

(2)  The nature and frequency of the information the furnisher provides to consumer reporting agencies; and

(3)  The technology used by the furnisher to furnish information to consumer reporting agencies.

(b)  Objectives. A furnisher's policies and procedures should be reasonably designed to promote the following objectives:

(1)  To furnish information about accounts or other relationships with a consumer that is accurate, such that the furnished information:

(i)  Identifies the appropriate consumer;

(ii)  Reflects the terms of and liability for those accounts or other relationships; and

(iii)  Reflects the consumer's performance and other conduct with respect to the account or other relationship;

(2)  To furnish information about accounts or other relationships with a consumer that has integrity, such that the furnished information:

(i)  Is substantiated by the furnisher's records at the time it is furnished;

(ii)  Is furnished in a form and manner that is designed to minimize the likelihood that the information may be incorrectly reflected in a consumer report; thus, the furnished information should:

(A)  Include appropriate identifying information about the consumer to whom it pertains; and

(B)  Be furnished in a standardized and clearly understandable form and manner and with a date specifying the time period to which the information pertains; and

(iii)  Includes the credit limit, if applicable and in the furnisher's possession;

(3)  To conduct reasonable investigations of consumer disputes and take appropriate actions based on the outcome of such investigations; and

(4)  To update the information it furnishes as necessary to reflect the current status of the consumer's account or other relationship, including, for example:

(i)  Any transfer of an account (e.g., by sale or assignment for collection) to a third party; and

(ii)  Any cure of the consumer's failure to abide by the terms of the account or other relationship.

II.  Establishing and Implementing Policies and Procedures

In establishing and implementing its policies and procedures, a furnisher should:

(a)  Identify practices or activities of the furnisher that can compromise the accuracy or integrity of information furnished to consumer reporting agencies, such as by:

(1)  Reviewing its existing practices and activities, including the technological means and other methods it uses to furnish information to consumer reporting agencies and the frequency and timing of its furnishing of information;

(2)  Reviewing its historical records relating to accuracy or integrity or to disputes; reviewing other information relating to the accuracy or integrity of information provided by the furnisher to consumer reporting agencies; and considering the types of errors, omissions, or other problems that may have affected the accuracy or integrity of information it has furnished about consumers to consumer reporting agencies;

(3)  Considering any feedback received from consumer reporting agencies, consumers, or other appropriate parties;

(4)  Obtaining feedback from the furnisher's staff; and

(5)  Considering the potential impact of the furnisher's policies and procedures on consumers.

(b)  Evaluate the effectiveness of existing policies and procedures of the furnisher regarding the accuracy and integrity of information furnished to consumer reporting agencies; consider whether new, additional, or different policies and procedures are necessary; and consider whether implementation of existing policies and procedures should be modified to enhance the accuracy and integrity of information about consumers furnished to consumer reporting agencies.

(c)  Evaluate the effectiveness of specific methods (including technological means) the furnisher uses to provide information to consumer reporting agencies; how those methods may affect the accuracy and integrity of the information it provides to consumer reporting agencies; and whether new, additional, or different methods (including technological means) should be used to provide information to consumer reporting agencies to enhance the accuracy and integrity of that information.

III.  Specific Components of Policies and Procedures

In developing its policies and procedures, a furnisher should address the following, as appropriate:

(a)  Establishing and implementing a system for furnishing information about consumers to consumer reporting agencies that is appropriate to the nature, size, complexity, and scope of the furnisher's business operations.

(b)  Using standard data reporting formats and standard procedures for compiling and furnishing data, where feasible, such as the electronic transmission of information about consumers to consumer reporting agencies.

(c)  Maintaining records for a reasonable period of time, not less than any applicable recordkeeping requirement, in order to substantiate the accuracy of any information about consumers it furnishes that is subject to a direct dispute.

(d)  Establishing and implementing appropriate internal controls regarding the accuracy and integrity of information about consumers furnished to consumer reporting agencies, such as by implementing standard procedures and verifying random samples of information provided to consumer reporting agencies.

(e)  Training staff that participates in activities related to the furnishing of information about consumers to consumer reporting agencies to implement the policies and procedures.

(f)  Providing for appropriate and effective oversight of relevant service providers whose activities may affect the accuracy or integrity of information about consumers furnished to consumer reporting agencies to ensure compliance with the policies and procedures.

(g)  Furnishing information about consumers to consumer reporting agencies following mergers, portfolio acquisitions or sales, or other acquisitions or transfers of accounts or other obligations in a manner that prevents re-aging of information, duplicative reporting, or other problems that may similarly affect the accuracy or integrity of the information furnished.

(h)  Deleting, updating, and correcting information in the furnisher's records, as appropriate, to avoid furnishing inaccurate information.

(i)  Conducting reasonable investigations of disputes.

(j)  Designing technological and other means of communication with consumer reporting agencies to prevent duplicative reporting of accounts, erroneous association of information with the wrong consumer(s), and other occurrences that may compromise the accuracy or integrity of information provided to consumer reporting agencies.

(k)  Providing consumer reporting agencies with sufficient identifying information in the furnisher's possession about each consumer about whom information is furnished to enable the consumer reporting agency properly to identify the consumer.

(l)  Conducting a periodic evaluation of its own practices, consumer reporting agency practices of which the furnisher is aware, investigations of disputed information, corrections of inaccurate information, means of communication, and other factors that may affect the accuracy or integrity of information furnished to consumer reporting agencies.

(m)  Complying with applicable requirements under the Fair Credit Reporting Act and its implementing regulations.

[Codified to 12 C.F.R. Part 334, Appendix E]

[Appendix E added at 74 Fed. Reg. 31519, July 1, 2009, effective July 1, 2010]


Appendix F–I [Reserved]

Appendix J to Part 334Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation

Section 334.90 of this part requires each financial institution and creditor that offers or maintains one or more covered accounts, as defined in § 334.90(b)(3) of this part, to develop and provide for the continued administration of a written Program to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account. These guidelines are intended to assist financial institutions and creditors in the formulation and maintenance of a Program that satisfies the requirements of § 334.90 of this part.

I.  The Program

In designing its Program, a financial institution or creditor may incorporate, as appropriate, its existing policies, procedures, and other arrangements that control reasonably foreseeable risks to customers or to the safety and soundness of the financial institution or creditor from identity theft.

II.  Identifying Relevant Red Flags

(a)  Risk Factors. A financial institution or creditor should consider the following factors in identifying relevant Red Flags for covered accounts, as appropriate:

(1)  The types of covered accounts it offers or maintains;

(2)  The methods it provides to open its covered accounts;

(3)  The methods it provides to access its covered accounts; and

(4)  Its previous experiences with identity theft.

(b)  Sources of Red Flags. Financial institutions and creditors should incorporate relevant Red Flags from sources such as:

(1)  Incidents of identity theft that the financial institution or creditor has experienced;

(2)  Methods of identity theft that the financial institution or creditor has identified that reflect changes in identity theft risks; and

(3)  Applicable supervisory guidance.

(c)  Categories of Red Flags. The Program should include relevant Red Flags from the following categories, as appropriate. Examples of Red Flags from each of these categories are appended as Supplement A to this Appendix J.

(1)  Alerts, notifications, or other warnings received from consumer reporting agencies or service providers, such as fraud detection services;

(2)  The presentation of suspicious documents;

(3)  The presentation of suspicious personal identifying information, such as a suspicious address change;

(4)  The unusual use of, or other suspicious activity related to, a covered account; and

(5)  Notice from customers, victims of identity theft, law enforcement authorities, or other persons regarding possible identity theft in connection with covered accounts held by the financial institution or creditor.

III.  Detecting Red Flags.

The Program's policies and procedures should address the detection of Red Flags in connection with the opening of covered accounts and existing covered accounts, such as by:

(a)  Obtaining identifying information about, and verifying the identity of, a person opening a covered account, for example, using the policies and procedures regarding identification and verification set forth in the Customer Identification Program rules implementing 31 U.S.C. 5318(l) (31 CFR 1020.220); and

(b)  Authenticating customers, monitoring transactions, and verifying the validity of change of address requests, in the case of existing covered accounts.

IV.  Preventing and Mitigating Identity Theft.

The Program's policies and procedures should provide for appropriate responses to the Red Flags the financial institution or creditor has detected that are commensurate with the degree of risk posed. In determining an appropriate response, a financial institution or creditor should consider aggravating factors that may heighten the risk of identity theft, such as a data security incident that results in unauthorized access to a customer's account records held by the financial institution, creditor, or third party, or notice that a customer has provided information related to a covered account held by the financial institution or creditor to someone fraudulently claiming to represent the financial institution or creditor or to a fraudulent Web site. Appropriate responses may include the following:

(a)  Monitoring a covered account for evidence of identity theft;

(b)  Contacting the customer;

(c)  Changing any passwords, security codes, or other security devices that permit access to a covered account;

(d)  Reopening a covered account with a new account number;

(e)  Not opening a new covered account;

(f)  Closing an existing covered account;

(g)  Not attempting to collect on a covered account or not selling a covered account to a debt collector;

(h)  Notifying law enforcement; or

(i)  Determining that no response is warranted under the particular circumstances.

V.  Updating the Program.

Financial institutions and creditors should update the Program (including the Red Flags determined to be relevant) periodically, to reflect changes in risks to customers or to the safety and soundness of the financial institution or creditor from identity theft, based on factors such as:

(a)  The experiences of the financial institution or creditor with identity theft;

(b)  Changes in methods of identity theft;

(c)  Changes in methods to detect, prevent, and mitigate identity theft;

(d)  Changes in the types of accounts that the financial institution or creditor offers or maintains; and

(e)  Changes in the business arrangements of the financial institution or creditor, including mergers, acquisitions, alliances, joint ventures, and service provider arrangements.

VI.  Methods for Administering the Program

(a)  Oversight of Program. Oversight by the board of directors, an appropriate committee of the board, or a designated employee at the level of senior management should include:

(1)  Assigning specific responsibility for the Program's implementation;

(2)  Reviewing reports prepared by staff regarding compliance by the financial institution or creditor with § 334.90 of this part; and

(3)  Approving material changes to the Program as necessary to address changing identity theft risks.

(b)  Reports.(1)  In general. Staff of the financial institution or creditor responsible for development, implementation, and administration of its Program should report to the board of directors, an appropriate committee of the board, or a designated employee at the level of senior management, at least annually, on compliance by the financial institution or creditor with § 334.90 of this part.

(2)  Contents of report. The report should address material matters related to the Program and evaluate issues such as: the effectiveness of the policies and procedures of the financial institution or creditor in addressing the risk of identity theft in connection with the opening of covered accounts and with respect to existing covered accounts; service provider arrangements; significant incidents involving identity theft and management's response; and recommendations for material changes to the Program.

(c)  Oversight of service provider arrangements. Whenever a financial institution or creditor engages a service provider to perform an activity in connection with one or more covered accounts the financial institution or creditor should take steps to ensure that the activity of the service provider is conducted in accordance with reasonable policies and procedures designed to detect, prevent, and mitigate the risk of identity theft. For example, a financial institution or creditor could require the service provider by contract to have policies and procedures to detect relevant Red Flags that may arise in the performance of the service provider's activities, and either report the Red Flags to the financial institution or creditor, or to take appropriate steps to prevent or mitigate identity theft.

VII.  Other Applicable Legal Requirements

Financial institutions and creditors should be mindful of other related legal requirements that may be applicable, such as:

(a)  For financial institutions and creditors that are subject to 31 U.S.C. 5318(g), filing a Suspicious Activity Report in accordance with applicable law and regulation;

(b)  Implementing any requirements under 15 U.S.C. 1681c--1(h) regarding the circumstances under which credit may be extended when the financial institution or creditor detects a fraud or active duty alert;

(c)  Implementing any requirements for furnishers of information to consumer reporting agencies under 15 U.S.C. 1681s--2, for example, to correct or update inaccurate or incomplete information, and to not report information that the furnisher has reasonable cause to believe is inaccurate; and

(d)  Complying with the prohibitions in 15 U.S.C. 1681m on the sale, transfer, and placement for collection of certain debts resulting from identity theft.

Supplement A to Appendix J

In addition to incorporating Red Flags from the sources recommended in section II.b of the Guidelines in Appendix J of this part, each financial institution or creditor may consider incorporating into its Program, whether singly or in combination, Red Flags from the following illustrative examples in connection with covered accounts.

Alerts, Notifications or Warnings from a Consumer Reporting Agency

1.  A fraud or active duty alert is included with a consumer report.

2.  A consumer reporting agency provides a notice of credit freeze in response to a request for a consumer report.

3.  A consumer reporting agency provides a notice of address discrepancy, as defined in 12 CFR 1022.82(b).

4.  A consumer report indicates a pattern of activity that is inconsistent with the history and usual pattern of activity of an applicant or customer, such as:

a.  A recent and significant increase in the volume of inquiries;

b.  An unusual number of recently established credit relationships;

c.  A material change in the use of credit, especially with respect to recently established credit relationships; or

d.  An account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor.

Suspicious Documents

5.  Documents provided for identification appear to have been altered or forged.

6.  The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identification.

7.  Other information on the identification is not consistent with information provided by the person opening a new covered account or customer presenting the identification.

8.  Other information on the identification is not consistent with readily accessible information that is on file with the financial institution or creditor, such as a signature card or a recent check.

9.  An application appears to have been altered or forged, or gives the appearance of having been destroyed and reassembled.

Suspicious Personal Identifying Information

10.  Personal identifying information provided is inconsistent when compared against external information sources used by the financial institution or creditor. For example:

a.  The address does not match any address in the consumer report; or

b.  The Social Security Number (SSN) has not been issued, or is listed on the Social Security Administration's Death Master File.

11.  Personal identifying information provided by the customer is not consistent with other personal identifying information provided by the customer. For example, there is a lack of correlation between the SSN range and date of birth.

12.  Personal identifying information provided is associated with known fraudulent activity as indicated by internal or third-party sources used by the financial institution or creditor. For example:

a.  The address on an application is the same as the address provided on a fraudulent application; or

b.  The phone number on an application is the same as the number provided on a fraudulent application.

13.  Personal identifying information provided is of a type commonly associated with fraudulent activity as indicated by internal or third-party sources used by the financial institution or creditor. For example:

a.  The address on an application is fictitious, a mail drop, or a prison; or

b.  The phone number is invalid, or is associated with a pager or answering service.

14.  The SSN provided is the same as that submitted by other persons opening an account or other customers.

15.  The address or telephone number provided is the same as or similar to the address or telephone number submitted by an unusually large number of other persons opening accounts or by other customers.

16.  The person opening the covered account or the customer fails to provide all required personal identifying information on an application or in response to notification that the application is incomplete.

17.  Personal identifying information provided is not consistent with personal identifying information that is on file with the financial institution or creditor.

18.  For financial institutions and creditors that use challenge questions, the person opening the covered account or the customer cannot provide authenticating information beyond that which generally would be available from a wallet or consumer report.

Unusual Use of, or Suspicious Activity Related to, the Covered Account

19.  Shortly following the notice of a change of address for a covered account, the institution or creditor receives a request for a new, additional, or replacement card or a cell phone, or for the addition of authorized users on the account.

20.  A new revolving credit account is used in a manner commonly associated with known patterns of fraud. For example:

a.  The majority of available credit is used for cash advances or merchandise that is easily convertible to cash (e.g., electronics equipment or jewelry); or

b.  The customer fails to make the first payment or makes an initial payment but no subsequent payments.

21.  A covered account is used in a manner that is not consistent with established patterns of activity on the account. There is, for example:

a.  Nonpayment when there is no history of late or missed payments;

b.  A material increase in the use of available credit;

c.  A material change in purchasing or spending patterns;

d.  A material change in electronic fund transfer patterns in connection with a deposit account; or

e.  A material change in telephone call patterns in connection with a cellular phone account.

22.  A covered account that has been inactive for a reasonably lengthy period of time is used (taking into consideration the type of account, the expected pattern of usage and other relevant factors).

23.  Mail sent to the customer is returned repeatedly as undeliverable although transactions continue to be conducted in connection with the customer's covered account.

24.  The financial institution or creditor is notified that the customer is not receiving paper account statements.

25.  The financial institution or creditor is notified of unauthorized charges or transactions in connection with a customer's covered account.

Notice From Customers, Victims of Identity Theft, Law Enforcement Authorities, or Other Persons Regarding Possible Identity Theft in Connection With Covered Accounts Held by the Financial Institution or Creditor

26.  The financial institution or creditor is notified by a customer, a victim of identity theft, a law enforcement authority, or any other person that it has opened a fraudulent account for a person engaged in identity theft.

[Codified to 12 C.F.R. Part 334, Appendix J]

[Appendix J added at 72 Fed. Reg. 63762, November 9, 2007, effective January 1, 2008, the mandatory compliance date is November 1, 2008; 74 Fed. Reg. 22643, May 14, 2009, effective May 14, 2009, except for the amendments in instructions 4, 10, 15, 20, 26, and 34 relating to appendices C to 12 CFR parts 41, 222, 334, 571, 717 and 16 CFR part 698, respectively, which are effective January 1, 2010; amended at 76 Fed. Reg. 14793, March 18, 2011; 80 Fed. Reg. 65919, October 28, 2015, effective November 27, 2015]


[Table of Contents] [Previous Page] [Next Page] [Search]

Skip Footer back to content