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Database Of Closed Accounts
Question: Are we permitted to keep a database list of accounts we have closed and wish not to open again? We do not belong to a negative file system, because the majority of banks in our area are not members of them either. We do not pull credit reports, thus we do not send adverse action notices. We just state "we do not care to service your account at this time." Some of our officers feel it may be illegal to keep a "list" whether on paper or in a database. Can you help?
Answer: We went to the attorneys for the answer to this one, feeling our response was much too quick and easy. Turns out their opinion agreed with ours. Financial institutions have the right to choose their customers, and none of our experts know of anything whatsoever that would prevent a bank from keeping an in-house list of former customers who have burned them, whether the list is in their heads, in a database, or on paper. Frankly, we think it's a good idea. And your turn-down with no reason attached is quite safe.
Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 6, 7/02
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