Anthony LaFaziaCEO, Atlantic Training · CEO at Atlantic Training | EdTech & Safety Compliance Leader

FCRA Risk-Based Pricing Rule: What Triggers a Required Consumer Notice

29 Jun 2026 · 1 min

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1:00

In this video, the host explains the Fair Credit Reporting Act (FCRA) risk‑based pricing rule, which requires a consumer notice when a lender uses a consumer credit report and then offers credit on terms that are materially less favorable than those offered to a substantial number of other consumers. The discussion contrasts this notice with the adverse‑action notice used for outright denials, clarifies that “materially less favorable” essentially means a higher cost—typically reflected in a higher annual percentage rate (APR)—and stresses the need for a consistent, objective method to determine which borrowers receive the notice. Failure to provide the notice leaves consumers unaware of how their data was used and can attract regulator scrutiny. The segment also includes a brief advertisement for Atlantic Training’s HR and soft‑skill courses hosted on the Wave platform.

Chapters

So when does this rule actually tap you on the shoulder? It's really about the difference between a no and a yes, but you're familiar with an adverse action notice. That's what we send when we flat out deny a loan. That's the no. Risk-based pricing is the yes, but. We're saying, yes, we'll lend to you, but it's going to cost you more. The rule triggers when two things happen together. First, you use a Consumer Report, a credit report, for an application. Second, based on that report, you grant credit on terms that are materially less favorable than the best terms you offer to a substantial amount of other consumers.
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"Materially less favorable" is just lawyer speak for "more expensive." Usually this refers to the annual percentage rate, the APR. But you can't just rely on a gut feeling that a deal looks pricey. You need a consistent method to decide who gets the notice. If you don't do this, you're keeping the customer in the dark about their own data. And regulators, they hate that.