WANADA Kindred line member and dealer attorney Michael Charapp of Charapp & Weiss, LLP, offers the following observations for dealers on consumer credit reports:
- This spring President Trump signed a law that made several changes to the Dodd-Frank financial reform law and related statutes. The primary purpose was to reduce regulatory burdens on financial institutions, particularly small banks.
- One provision of the new law that goes into effect Sept. 21 could affect dealerships. It amends the Fair Credit Reporting Act to permit a consumer to freeze or unfreeze his or her credit report at no cost and specifies procedures to do so. That could mean a customer with frozen credit may come to a dealership seeking delivery of a vehicle.
- Dealership staff may find they cannot access a consumer’s credit. But the consumer is issued a notification number he or she can use to lift the freeze within an hour of a toll-free phone call or a secure electronic request.
- The consumer may not be willing to wait for the freeze to be lifted, or may not have the appropriate credentials. Dealer staff can avoid this prospect by asking the customer early in the sales process whether a freeze is in place so an unfreeze request can be sent while the sale goes forward.