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#1615337 - 10/13/11 04:35 PM Adverse Action Notice on Deposit accounts
Banker83 Offline
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In our institution we do not use the "score" that is provided by Qualifile/Chexsystems, but base the decision to open or not open the deposit account on the "accept" or "decline" recommendation from Qualifile, does the score still need to be provided to the consumer? Does it make a difference if we have a deposit account that we offer for those customers that would normally be declined, kind of like a "new beginning" account.

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#1615445 - 10/13/11 05:57 PM Re: Adverse Action Notice on Deposit accounts Banker83
Dan Persfull Offline
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Not knowing the inter workings of how the systems assign the accept or decline recommendation I would have to speculate it is based on the score generated therefore the score is a factor in your decision.
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#1615484 - 10/13/11 06:22 PM Re: Adverse Action Notice on Deposit accounts Dan Persfull
EmilyAnn Offline
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Dan is right. We use the Qualifile system, and we get to select which Qualifile scores result in the Accept, Decline, or Review decisions. Qualifile gives you the option of choosing from the Risk Averse, Risk Moderate, and Risk Aggressive profiles. So even if all you get are the decisions, they are absolutely based on the score.

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#1615591 - 10/13/11 07:59 PM Re: Adverse Action Notice on Deposit accounts EmilyAnn
Banker83 Offline
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Thanks for the information. That is what I was thinking

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#1616052 - 10/14/11 07:00 PM Re: Adverse Action Notice on Deposit accounts Banker83
lisa Offline
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Gainesville, TX USA
We are also being provided a QualiFile Score when we obtain a ChexSystems report. I have been told that we do NOT deny a new account application based on this score, but on the information obtained in the ChexSystems consumer report.

My question: The score is being provided (and yes you know it is looked at). However, we say we do not use it. Will that pass with examiners? Or are we obligated to provide the credit score disclosure - safe harbor?

Thanks,

Lisa

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#1616141 - 10/14/11 08:34 PM Re: Adverse Action Notice on Deposit accounts lisa
EmilyAnn Offline
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IMO, that will not work. You need to provide the credit score disclosure. It's not hard to add the information to the AAN.

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#1617978 - 10/20/11 01:43 PM Re: Adverse Action Notice on Deposit accounts EmilyAnn
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Somewhere in the middle
Are you adding the reason that effected teh score too? If so , how many? Up to four?

I found a sample FIS Adverse Action Notice on ABAs site, (Was supoose to have been issued by FIS, but they later took it back) it has some of the reasons, but when comparing it to the reasons that show in their report they don't match.

Also, their form notice says "Provide four reasons", my research has indicated up to four.
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#1618244 - 10/20/11 05:49 PM Re: Adverse Action Notice on Deposit accounts DD Regs
EmilyAnn Offline
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The credit score disclosure section requires that you provide the date of the credit report, the credit score, and up to four factors that adversely affected the score (5 if excessive inquiries was one of the factors, and in every case, if excessive inquiries shows up, it must be disclosed).

If there are fewer factors that adversely affected the score, you can disclose fewer. However, our experience has been that credit reports and Qualifile reports automatically show four reasons (five if excessive inquiries), so our AANs repeat what is shown on the report.

We developed our own deposit AAN since FIS pulled out on this. They had a list of factors that could show up, so we built that into a fillable PDF form for our new accounts staff to use.

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#1661533 - 02/07/12 04:01 PM Re: Adverse Action Notice on Deposit accounts EmilyAnn
CrookedVulture Offline
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Is this the document that people are referring to regarding FIS? It's still available on their website.

http://www.fisglobal.com/ucmprdpub/groups/public/documents/document/c010148.pdf

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#1661575 - 02/07/12 04:57 PM Re: Adverse Action Notice on Deposit accounts Banker83
EmilyAnn Offline
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We made our own Adverse Action Notice based on the regulatory model form, which is what FIS has done as well. Ours looks substantially similar to this one.

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#1661673 - 02/07/12 07:31 PM Re: Adverse Action Notice on Deposit accounts EmilyAnn
Heather301, CRCM Offline
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Our Adverse Action lists the consumers social security number on the form. Is this allowed from a privacy standpoint? I know we haven't listed it in the past but it is hard coded into the form from Wolters Kluwer.
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#1661879 - 02/08/12 02:18 PM Re: Adverse Action Notice on Deposit accounts Heather301, CRCM
CrookedVulture Offline
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Originally Posted By: Heather301
Our Adverse Action lists the consumers social security number on the form. Is this allowed from a privacy standpoint? I know we haven't listed it in the past but it is hard coded into the form from Wolters Kluwer.


I don't see why it wouldn't be allowed. However, I also think it adds unnecessary risk from an information security standpoint.

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#1661964 - 02/08/12 03:44 PM Re: Adverse Action Notice on Deposit accounts Banker83
Andy_Z Offline
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Some states may have laws prohibiting it and it may also depend on where it is printed. Problems I have seen in the past were that if you tapped the window envelope this way and that way, the SSN could be read through the window.
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#1665614 - 02/15/12 05:07 PM Re: Adverse Action Notice on Deposit accounts Heather301, CRCM
EmilyAnn Offline
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Originally Posted By: Heather301
Our Adverse Action lists the consumers social security number on the form. Is this allowed from a privacy standpoint? I know we haven't listed it in the past but it is hard coded into the form from Wolters Kluwer.

I'd be on Wolters Kluwer to have it removed, or at least have all but the last 4 numbers masked. There is no reason for the full SSN to appear on the form, and it unnecessarily increases the risk of identity theft.

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#1665622 - 02/15/12 05:15 PM Re: Adverse Action Notice on Deposit accounts Banker83
SUSANE1 Offline
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ok, we use Chexsystems and just call in and get info over phone... such as "account charged off" "nsf 10 times" "account abuse"... but at no time is a credit score mentioned. So if we deny the account to be opened, what type of denial should be given?

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#1665971 - 02/16/12 01:30 AM Re: Adverse Action Notice on Deposit accounts Banker83
rlcarey Offline
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Use the top half (prior to the credit score information) in the ChexSystems's document linked previously in this thread.
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#1670859 - 02/28/12 11:14 PM Re: Adverse Action Notice on Deposit accounts Banker83
cbailey Offline
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What is the time frame for delivering the FCRA notice for deposit account denial?

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#1670886 - 02/29/12 02:54 AM Re: Adverse Action Notice on Deposit accounts Banker83
rlcarey Offline
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There is no specific time frame outlined in the FCRA. It would have to be deemed reasonable however by your regulatory agency.
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#1671137 - 02/29/12 04:01 PM Re: Adverse Action Notice on Deposit accounts Banker83
cbailey Offline
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We wanted a second review of the notice before it went out thus would require it be mailed. We wanted it in the mail next day if possible. Thank you for your help.

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#1677961 - 03/15/12 03:46 PM Re: Adverse Action Notice on Deposit accounts Banker83
learningbanker Offline
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Massachusetts
Just to be clear. If you receive a Qualifile report that has a score, but the bank uses their own CIP/ Red Flag process to determine if the account will be opened and declines the new account. Must the score be included on the denial form?
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#1677965 - 03/15/12 03:51 PM Re: Adverse Action Notice on Deposit accounts Banker83
EmilyAnn Offline
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If the score is on the Qualifile report, we include it on the denial form even if it wasn't technically "used" in our decision. Hard to argue that it played no part if it's there...

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#1679159 - 03/19/12 03:27 PM Re: Adverse Action Notice on Deposit accounts Banker83
Tango#1 Offline
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I've done some reading and found an article giving the opinion that the use of a Qualifile score in your decision making does not necessitate disclosure of such on an adverse action notice. "If an institution uses a Qualifile score solely in connection with deposit transactions, the institution is not required to disclose the score" The reasoning is based on the definition of a "credit" score under FCRA which is "numerical score...used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors....."The words "used by", "credit", and "loan" in the definition indicate that a score used solely for non-credit purposes is not a credit score.

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#1679197 - 03/19/12 04:07 PM Re: Adverse Action Notice on Deposit accounts Tango#1
Ted Dreyer Offline
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The language of that definition was pointed out to the regulators in the proposed rule stage. Their response was:

"The Board believes that a person would need to disclose a credit score obtained from a consumer reporting agency as part of the adverse action notice as set forth in section 1100F of the Dodd Frank Act, even if the person used the credit score to take adverse action for a non-lending product. In requiring credit score disclosures, section 1100F does not state that the credit score disclosures are only required for adverse action decisions related to credit."
Reg B Final Rule

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#1679546 - 03/20/12 04:14 AM Re: Adverse Action Notice on Deposit accounts Tango#1
rlcarey Offline
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Galveston, TX
Originally Posted By: Tango#1
I've done some reading and found an article giving the opinion that the use of a Qualifile score in your decision making does not necessitate disclosure........


Considering that you give no source for this information and FIS has itself determined that a Qualifile score is a credit report under the new DFA requirements and have changed their reports to include the range of scores, the main factors that impacts the scores, and released a model AAN notice for their clients to use, I think your argument is a little late in the game. I would venture to guess that the article you read was not a current article.
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#1679765 - 03/20/12 04:04 PM Re: Adverse Action Notice on Deposit accounts Banker83
Tango#1 Offline
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Below is the response I received yesterday in regards to this question. The "source" is a Senior Compliance Manager with
FIS Regulatory Advisory Services


You are correct that DFA Section 1100f amended both the risk-based pricing notification rules and the adverse action notices to include the 5 facets of information you cited. However, these are in relation to adverse action taken on applications for new credit and reviews of existing credit, not the establishment of a deposit account. Of course you aptly state that if an overdraft LOC is applied for in connection with that depsosit account and there is adverse action taken based upon the factors that trigger the risk-based pricing notice, then the requirements even in Qualifile kick in. So to bring it all together, if Qualifile's credit information and scores can be used to determine terms for an overdraft LOC (or for any other extensionof credit) then yes, you should have it updated accordingly.

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