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#1693880 - 04/30/12 05:51 PM AAN - Denied due to insufficient collateral
msgwater Offline
Junior Member
Joined: Nov 2008
Posts: 33
Ohio
Applicant applied for a Reg. U purpose loan. Bank pulled a credit report. The request is being denied soley due to insufficient collateral. Since the application is not being denied based on any information in the credit report, do you need to disclose that a credit report was pulled and/or include the credit score disclosure under FCRA?

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#1693884 - 04/30/12 05:55 PM Re: AAN - Denied due to insufficient collateral msgwater
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,951
Galveston, TX
No.
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#1693906 - 04/30/12 06:31 PM Re: AAN - Denied due to insufficient collateral msgwater
msgwater Offline
Junior Member
Joined: Nov 2008
Posts: 33
Ohio
Thank you for your quick response. I did not think we needed to. I found an article that indicated you should disclose just to be safe. The thought was not leave yourself open to the regulator's interpretation that one of the denial reasons was in part based on the credit report. In this case, since the only denial reason we are using is insufficient the collateral, I don't see how a regulator could make such an interpretation.

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#1693930 - 04/30/12 06:48 PM Re: AAN - Denied due to insufficient collateral msgwater
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,951
Galveston, TX
Over disclosure is not optimal in these cases. You are telling them that the denial was related to thier credit report and granting the consumer specific rights, such as a free credit report, etc., which is not the case.
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#1693963 - 04/30/12 07:15 PM Re: AAN - Denied due to insufficient collateral msgwater
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
Joined: Nov 2004
Posts: 494
Central Illinois
If the collateral is insufficient why did you pull credit?

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#1693967 - 04/30/12 07:18 PM Re: AAN - Denied due to insufficient collateral msgwater
raitchjay Offline
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Joined: Oct 2009
Posts: 8,840
OK
Can't speak for the OP, but we often pull credit before having a collateral valuation, as i would guess many if not most banks do. I'm guessing the reason is: why bother with a collateral valuation if your applicant has lousy credit.
Last edited by raitchjay; 04/30/12 07:18 PM.
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#1693984 - 04/30/12 07:39 PM Re: AAN - Denied due to insufficient collateral raitchjay
Sinatra Fan Offline
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Posts: 5,568
New Jersey
We follow the same approach as raitchjay.
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#1702130 - 05/22/12 07:07 PM Re: AAN - Denied due to insufficient collateral msgwater
JubileeAnne97 Offline
100 Club
Joined: Mar 2007
Posts: 112
Empire State
If the credit score is above our banks approval threshhold, but it was declined due to judgement, which was determined by reviewing the credit report agency. Do we need to disclose the credit score on the AAN?
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