I know I read just yesterday in one of the on-line forums that you did not have to give a written adverse action notice if you turn down a deposit account because of a Chexsystem report, that an oral notice was sufficient. This question just came up at my bank this morning and I can't find the comment any where! Was I dreaming or can someone help me out here!

Thanks!!!!

Don't confuse a traditional adverse action notice and the FCRA requirements when a product or service is denied.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Andy, if you have time, please share your wisdom with me.

Thanks

Susan,
Reg B requires written notice of adverse action when making a CREDIT decision.

The FCRA applies when making a decision to open a deposit account (with no credit feature).
The FCRA allows you to provide the consumer orally, in writing, or electronically, the name, address, and telephone number of the consumer reporing agency, from which you recieved the information. Sec 615(a)

Thanks so much! I have very little to do with compliance and wasn't sure where to turn for an answer. This forum has been very helpful.

Thanks again.

I think Jennifer did a good job explaining that. One other thing to watch for is your "deposit" product; does it have a line of credit with it possibly making the denial credit related? Sometimes we lose sight of the forrest for the trees.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Susan,

Chex Systems will provide you with free copies of the notice you give to deposit customers you turn down because of their Chex System History. You can call them at 1-800-428-9623.

MH or anybody else, do you retain copies of the notices in your files for those accounts you've turned down?

Bob,
Yes, we keep a copy for our files along with the new account application information.
We also have the customer fill out the form & sign, then we check. If chexsystem said they
have past problems & we decide not to open account, we make a copy and give to customer. Since the phone number is their for the customer to call, it also makes it easier for them.

Just adding a comment about the Chexsystems adverse action form. I believe it is mandatory to give out this form as a procedure from that company. Whomever deals with that vendor in your organization would have received that info and a packet of those forms.

In our bank we make each branch office responsible for keeping that form in stock. It is part of our internal audit procedures when auditing that function.