Photocopying The Driver's License: Sometimes it IS acceptable
by Mary Beth Guard, BOL Guru
Question: During the mortgage application process, our attorneys are photocopying driver's licenses of the applicants to obtain the pertinent information used when conducting a title search and for title insurance purposes. Are we in violation of the Privacy Act if we obtain the photocopies and retain them in the Mortgage file?
My thought is that we are in violation of the Privacy act, and we should not be retaining the photos. Would it be a better practice for the attorney's to discard the copies after they obtain the necessary information, or should I advise them not to continue this practice?
Answer: This is one instance where I think the procedure being followed is acceptable. Here's why:
When your attorneys are photocopy driver's licenses, they are collecting information -- not sharing it. The collection of the information is being done to facilitate the transaction initiated by the customer and is also a prudent precaution against fraud. It helps to ensure the person applying for the loan is who he really says he is.
I see no problem with this procedure under the GLB privacy provisions.
Since your attorneys are not in a position to be making decisions relating to an aspect of credit, you also would not incur a problem under Regulation B for collecting the information, assuming access to the photocopies is not made available to those in the lending area of your bank.
The original version appeared in the March 2002 edition of the Oklahoma Bankers Association Compliance Informer.
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