Our office is in an uproar over whether or not we have to obtain signatures before credit is pulled. I have a history in banking and have always been taught that we must have a signed application. An agent at the credit bureau said all we need is a verbal intent to do business. Please point us in the right direction.
Our Consumer Lending unit received the following response to a recent audit. "According to the regulation, a bank may pull a credit report on a person if they have a permissible purpose. An application for credit is considered a permissible purpose. When the Contact Centers take applications over the telephone (he doesnt mention anything about the Internet) they are only speaking with one of the applicants, but if the application is joint, credit bureaus aer obtained for both applicants. Without talking to the joint applicant, the bank can not be sure that the second individuaal is aware of, or wants to apply for a loan. If a co-applicant does not want to be an applicant on the loan, the Bank would not have a permissible purpose for obtaining the credit bureau. It is recommended that the Consumer Lending Dept require that all parties on a loan application be made aware that a credit bureau will be obtained." I realize that this is only a recommendation, but this team believes because a compliance auditor wrote this, they need to act on this recommendation. Is there some litigation that suggests we need to do this? I simply can not find anything, anywhere that states we are required to verbally inform a co-app that we are going to pull a cbr. What am I missing here? Is this a business decision and if so, based on what? If its written somewhere, I would like to see it. What are other institutions doing?
For adverse action notices where it is our procedure to send out the notice with reasons, how do we handle a borrower and coborrower situation where we are declining the borrower for one reason (delinquent credit obligtions) and the coborrower for another reason (too high debt to income ratio). Do we put all reasons on one adverse action notice and let the applicants figure out which reason applies to whom or can we send out two separate notices and copy both applicants with the others adverse action notice? Which way makes more sense?
I was told that Reg B required us to send out an adverse action notice anytime we revoked a debit card. I'mconfused over this since Reg B deals with granting credit and a debit card accesses the checking account. Can you provide me some guidance?