Hello gang, I have a question regarding the "7 year rule" I understand that the rule is that the time starts 6 mo after you missed your first payment but my question is when looking at your credit report do you use this rule by looking at the date of last activity or by date reported. Example I have an account that has the date of last activity as 5/95 and the date reported as 2/99 that is quite a bit of difference in time. Thanks for your help in advance
It goes by the date of last activity. Be sure you have a copy of your report that shows the 5/95 date when you dispute so they can't get away with trying to "reage" the account. DemPooches
Thanks so much for the info. So if they must go by the date of last activity then can you tell me what the date reported means? does it affect anything? Thanks in advance
The FCRA enacted in 1996 states that the date of beginning the 7 year, (actually 7 &1/2 year) reporting period commences on the first month of first deliquency on the account,however, the provisions of the act did not come into effect until Dec. 1997, so ac****s that were in default in any form prior to that date were still to be reported from the charge-off date ,when ever that was. So, if your account was in default prior to Dec. 1997,even if the OC decided to wait until JULY 2002 to charge it off, that would still be the "start" date.
Date last reported just means that the creditor submitted the information to the credit bureau again. It doesn't mean that you were the initiator of any activity, they just re-supplied the information to the credit bureau. Sometimes this happens when they move from one computer system or software to another, or your account has reached a certain age. It means nothing really. If your account was open, and a creditor was looking at the date updated, it might be a good indication to them that the informationthey were seeing was up to date.
Pkedo, I can't look it up this second, but I believe there is one other factor that figures in when the delinquency was prior to Dec 1997. We went through this a few months ago and the key point on whether it counted as before or after the new legislation was based on when the account was first REPORTED. In other words, if it wasn't charged off and reported to the CRAs until 1999, the new rule would apply. If someone hasn't posted it by then, will see if I can find and post the info when I get back. DemPooches
OK, below is an excerpt from the Amason FTC opinion letter which addresses how long accounts can be reported based on the new vs. the old legislation. Here's the link to the whole letter. http://www.ftc.gov/os/statutes/fcra/amason.htm 3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred? Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3) Hope this helps. DemPooches
The only problem with this rule is in the case of some retail establisments that changed hands, went BK etc. I will not name them here, but anyone who has been contacted by a CA lawyer lately on VERY old accounts, knows who I mean. What they did, when they were transferring their ownership was to keep old unpaid accounts on the books as "active" accounts,not delinquent,and not charged off, in violaton of FDIC charge-off rules.So the "new" owners (not CA's) thought they were buying good accounts.When the auditors finally figured it out and charged them off and sold them to CA's they were years and years past their ORIGINAL first delinquency,but on the records, they were just recently 2-3 years first delinquent prior to chargeoff. It's a MESS!!
FDIC Charge off rule? What is an "FDIC Charge Off Rule" and what does that have to do with a company going bankrupt. The FDIC is the federal deposit insurance corp. It is an unsurance company the insures your bank deposits for up to $10k. The FDIC has rules and audits the bank's that it insures. In addition to FDIC audits, banks are also regulated and audited by multiple other agencies, such as the Federal Reserve Bank, Comptroller of Currency, and state banking regulators. I used to work for a bank, so I was familiar with the auditors and their requirements. Yes. You are correct that there are very specific rules that banks must follow regarding deqlinquent accounts. They must charge them off within a given timeline. This rule was reinforced after the S&L failures of the 80's when many S&L's were found to have "dead" loans on their books as assets which were never charged off. Banks, unlike S&L's, were held to a higher standard and could not get away with much of the stuff S&L's were doing to their books. Here is the problem. None of this has anything to do with corporate books and accounts. The FDIC does not regulate corporations. However, accouting standards do demand that delinquent loans be charged off. As recent history has shown, many companies play fast-n-loose with their numbers. The bottom line is that most private companies can make their own decision on when to charge off a loan. If the same company wants to be held up to accounting scrutiny (such as being publicy traded), then they will tend to have realistic policies regarding chargeoffs.
Re: FDIC Charge off rule? The FDIC is not quite as limited in it's scope of jurisdiction and enforcement as you believe.All of the credit card companies, all of the financial servicing companies behind store accounts etc. are subject to the FDIC rules on how to classify debt, when they MUST charge it off, how they are allowed under what circumstances to re-age an account, and how often. You do not seem to understand that if a law in the FCRA says "dated from first delinquency leading to chargeoff" and if the creditor has not obeyed the FDIC rules on WHEN to charge off an account,then by obvious logic, they have also not followed the rules as to when they can say the first delinquency has occurred. As to keeping "secret" the names of creditors I BELIEVE to have done this,I try not to follow the idea of accusing without verification.I did that a few weeks ago with a CA I BELIEVED to be unlicensed, and had to correct my mistake. http://www.fdic.gov/regulations/laws/rules/5000-1000.html
Re: FDIC Charge off rule? The FDIC is the federal deposit insurance corp. It is an unsurance company the insures your bank deposits for up to $10k. HOW ABOUT $100,000??? You can CHEAT...(NOT REALLY) $100,000 WIFE $100,000 HUSBAND $100,000 WIFE AND HUSBAND $100,000 WIFE AND ONE KID $100,000 WIFE AND OTHER KID $100,000 HUSBAND AND ONE KID $100,000 HUSBAND AND OTHER KID $100,000 KID AND OTHER KID $100,000 WIFE AND MOTHER $100,000 HUSBAND AND MOTHER-IN-LAW ... ... ... AND FOR THE OTHER $900,000,000 YOU CAN REPEAT AT OTHER BANKS...(MUST NOT BE OWNED BY ANY OTHER BANKS)...YOU CAN'T USE 10 DIFFERENT BANK of AMERICA BRANCHES... You would have to use BofA WELLS FARGO Your CREDIT UNION WASHINGTON MUTUAL ... ... ... ...
FDIC Limits Regarding the FDIC insurance limits: Yeh George, you are right. The limits are higher. I forgot a zero. I wish I had $100k in cash sitting in a bank to insure Actually, isn't the insured ceiling something like $50k per account, with a max limit of $100k per person? Sorry about the mistake... Regarding the FDIC juristiction over the books: Yes, if the underwriter of a line of credit is an FDIC insured financial institution, then the FDIC accounting rules come in to play. Some companies float their own credit, some farm it out. For example, a small business such as a dentist or doctor tends to float their own credit. They are not subject to the FDIC regulations.
Re: FDIC Limits The FDIC administers, writes, and enforces a whole range of things that have NOTHING to do with it's "insurance" of funds. If you would have bothered to look at the site I posted, you would have seen links to the MAJOR part of their activities. I am posting the link to just the table of contents on their main page. http://www.fdic.gov/regulations/laws/rules/5000-100.html
Re: FDIC Limits I did look at it, but I don't see where they control how a private business classifies their loans, which is what this thread is discussing. Yes, you are right, the FDIC does a lot of things. They do all these things in order to insure that the banks they insure stay solvent.
Re: FDIC Charge off rule? ================================== Or about 5 % of the total amount at risk.
