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?

No.

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.

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.

If the collateral is insufficient why did you pull credit?

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.

We follow the same approach as raitchjay.

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?