When should a credit union notify its member about negative information being reported to a credit bureau?

The correct answer indicates that a credit union should notify its member either prior to reporting negative information to a credit bureau or within 30 days after doing so. This approach is in line with regulatory requirements aiming to ensure transparency and consumer rights.

Under the Fair Credit Reporting Act (FCRA), institutions are obligated to inform consumers when negative information about their credit is reported. This notice serves as a tool for consumers to be aware of their credit standing and gives them the opportunity to dispute any inaccuracies or take corrective actions. By providing this information either before the negative report or shortly after it has been filed, the institution upholds its responsibility to keep the member informed about critical financial matters that can impact their creditworthiness.

The other options do not fully comply with the FCRA requirements. For example, notifying only after negative information has been furnished does not give the consumer a chance to mitigate any potential impact on their credit score. Similarly, notifying solely when requested by the member does not proactively address the need for that information, potentially leaving the consumer unaware until it's too late. Prior notification before entering into a lending agreement also does not apply, as it is crucial to inform them after negative events are reported rather than before they have any chance to take action following the report