While doing an internal compliance review, I noticed that the bank is not disclosing credit score information (score, score date, range, and key factors) on its denial notices for real-estate secured loans. The bank employee in charge of these notices stated that she did believe the bank needed to include this information on the denial because it provides the credit score exception disclosure under Regulation V that contains the same information.

Not quite, and it appears the bank employee got it backwards. If the credit score information is provided in an adverse action notice, the bank need not provide a risk-based pricing notice, not the other way around.

Section 1022.74 of Regulation V discusses the exceptions for when a risk-based pricing notice is not required. Specifically:

Section 1022.74(b) provides an exception “if the person provides an adverse action notice to the consumer under section 615(a) of the FCRA.”

Sections 1022.74(d) (mortgage loans) and (e) (non-mortgage loans) allow a credit score notice to be provided in lieu of the risk-based pricing notice when it is provided “as soon as reasonably practicable after a credit score has been obtained” but not later than loan consummation for closed-end credit or the first transaction for open-end credit.  

Since a risk-based pricing notice is not required in these cases, a credit score exception notice is not required. 

Indeed, the Federal Reserve Board clarified in its “Consumer Compliance Outlook” of 2012 in Q&A 1 that a risk-based pricing notice is not required if an adverse action notice is provided:

Must risk-based pricing notices be provided to denied applicants?

Section 1022.72(a) of Regulation V (12 C.F.R. Part 102) specifies when a creditor must provide a risk-based pricing notice to a consumer applying for credit, subject to the exceptions in §1022.74. If an application is denied and an adverse action notice is provided, a risk-based pricing or exception notice is not required. See §1022.74(b).
https://www.consumercomplianceoutlook.org/2012/first-quarter/risk-based-pricing-notice-requirements/ 

However, while the bank may forgo the exception notice if it provides an adverse action notice, it does not work in the reverse, that is, it may not forgo including credit score information in the adverse action notice because it has provided a credit score risk-based pricing exception notice. 

With regard to the Notice to Home Loan Applicant, that notice is required even if an adverse action notice is provided with credit score information. However, as noted, if the bank provides this notice, it does not have to provide the credit score risk-based pricing exception notice. (January 2025)