The Federal Reserve Board and Federal Trade Commission have issued a final rule that requires lenders to disclose their use of risk-based pricing along with a notice that tells consumers they will not get the best deal because of their credit score.

Starting in January 2011, lenders must provide mortgage applicants with a risk-based pricing notice if they will receive less favorable terms than 40% of the lender's other customers.

The final rule has two tests, including a 40%/60% test, for determining when consumers should get a RBP notice.

The Fair Credit Reporting Act rule, mandated by Congress in 2003, provides some exceptions to the RBP notice requirement, including one for single-family lenders that provide applicants with their credit score.

Along with the credit score, the lender must provide a notice that "describes the creditor's use of credit scores to set the terms of credit," the final rule says.

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