Here in OCCM, we know that our customer agency A/OPCs are always working hard to keep track of the latest legislative initiatives that could potentially affect the GSA SmartPay program, even over the holiday season. When glancing through my email during the week of Christmas, I received a question from one of my customer agencies regarding a new piece of legislation entitled “The Financial Services and General Government Appropriations Act of 2010” (more specifically Section 738 of the Act). The customer wanted to know if the language in Section 738 would affect the way that we currently perform creditworthiness checks when issuing travel cards to new travel cardholders. Although many of you would think, “what a way to start the holiday season”, being a self-proclaimed legislative research nerd, I dove right in to find out more. What a great early Christmas present! Subsequently, we have received several other inquiries regarding this legislation.
So, here’s the scoop on Section 738 of the Financial Services and General Government Appropriations Act of 2010:
What Does the Act Say About Creditworthiness Checks?
Section 738 says that “each executive department and agency shall evaluate the creditworthiness of an individual before issuing the individual a government travel charge card.” Agencies have to complete this evaluation by using a consumer report from a consumer reporting agency and follow the guidelines outlined in the Fair Credit Reporting Act. These procedures must be followed when issuing a travel card to a new cardholder. The result of the creditworthiness check will determine whether or not you can issue a travel card to a new cardholder. A cardholder that does not have a history of credit or has an unsatisfactory history of credit may not receive a travel charge card. These cardholders, however, may still receive a restricted charge, debit, or stored value card in accordance with agency policies and procedures.
Finally, Section 738 requires that executive departments and agencies develop “guidelines and procedures for disciplinary actions to be taken against agency personnel for improper, fraudulent, or abusive use of government charge cards.”
How does this differ from how I currently complete creditworthiness checks?
Does a lot of the above information sound familiar? That’s because it is. The language in Section 738 outlines the same requirements for creditworthiness checks that A/OPCs have been following in accordance with OMB Circular A-123, Appendix B. The only difference is that the OMB Circular was guidance and the Financial Services and General Government Appropriations Act of 2010 made the requirements law.
OMB Circular A-123, Appendix B Refresher
Now that you can breathe a sigh of relief knowing that there are no new requirements for creditworthiness checks, let’s go through a quick review of the highlights of the OMB Circular requirements for creditworthiness checks.
When do I have to obtain a credit score?
Agencies must obtain a credit score for all new travel charge card applicants. You do not have to obtain a credit score for current charge cardholders.
What score must be obtained in order to give the cardholder a travel charge card?
The cardholder must receive a credit score of 660 or higher to be issued an unrestricted travel charge card.
What should I do if the cardholder receives a score of less than 660?
The agency may issue the cardholder a restricted travel charge card, debit card, or prepaid card. In these cases, the agency should apply more stringent restrictions on the cards.
How do I obtain a credit score?
There are many ways to obtain a credit score. Agencies may obtain scores through consumer reporting agencies (e.g. FICO), OPM’s Center for Federal Investigative Services (CFIS), GSA’s Financial and Business Solutions (FABS) Schedule, or through their GSA SmartPay 2 contractor banks if the requirement is included in their task order with the bank (see Section CT 1.20.5 “Credit Checks at the Task Order Level” for more details).
For more information on Section 738 of the Financial Services and General Government Appropriations Act of 2010 or OMB Circular A-123, Appendix B, please go to:
About the Author: Joline McDonald is a member of the Office of Charge Card Management’s Service Delivery Division. Joline, one of GSA's dedicated telework employees, works on the GSA SmartPay program from her home office in Lewisberry, PA.