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Keeping Employee Credit Reports in a Separate Loan File
by Dan Persfull & Andy Zavoina, BOL Gurus
Guru BIOS
Question: The question has been raised whether we should keep credit reports for employees who have loans with our bank in a separate file not accessible to note department personnel. We keep credit reports used for annual employment screening purposes in a separate file accessible only to senior bank management. However, credit reports obtained for purposes of a loan to an employee are kept in the customer (employee) credit file as with any other customer. Are we violating the employee's privacy with this practice?
Answer - Dan: We keep all employees credit and financial information in a sealed file. Only senior management, the senior loan review officer and myself have access to these files.
Answer - Andy: You are not violating any privacy rights by doing this. However, if you separate financial statements, credit reports and such you have provided the employee with an extra layer or privacy from the stray eyes of peers. The employees may be more comfortable with this and that is why it is a common practice. These just need to be accessible to those in the review, loan and management functions who may need them from time to time.
First published on BankersOnline.com 10/03/05
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