We have decided to modify our debit card program by creating a lower limit option that has less stringent approval criteria. The consumer will be givne the choice as to which limit they are applying for. My question is if the consumer applies for the higher limit and does not qualify but does qualify for the lower limit what notice are we required to send the consumer? We do pull credit reports as part of the qualification process, but the decision would not necessarly be based on the credit report.

If the decision is based on the credit report, then you would owe them a FCRA adverse action notice (no reasons for the adverse action are required as this is not a credit transaction). If the credit report did not play a part in the decision, there are no regulatory disclosure requirements for debit card applications.

Thank you, that was what I was hoping to hear.