We are offering "second chance" checking accounts for lower QualiFile (ChexSystems) scores. These accounts have a higher monthly fee than our most popular accounts, and they have other modest restrictions as well.

If a potential customer comes in and only qualifies for a "second chance" account, do we still have to furnish an adverse action form?

Thanks in advance,

West Delta

I would be interested in the answer too. We are split on this. If they accept the second chance (much like a counter offer)then that is not a decline. However...since the second chance has higher fees and is not the account they applied for...I would say yes to the AA. If nothing else so they can see what they need to fix to get that credit score up or if it is a complete surprise. It could be case by case basis, but that just makes things more confusing to the front staff opening the account. I would rather error on the side of caution in this case and just do it.

You are conflating ECOA adverse action requirements, which don't apply in this fact situation, with FCRA notice requirements, which do. Unless there is a score involved, the FCRA notice can be oral or written.

There is no counteroffer provision under FCRA.

There is a score involved. (Qualifile score based on previous deposit account behaviour.)

Thanks John!

So, to make sure I understand you, are you saying that IF there is a score involved (there is as the bank uses QualiFile), and the customer only qualifies for a "second chance" account but not a typical conventional account, a written FCRA notice (such as an "adverse action" notice) should be furnished?

Thanks again,

WD

If the second chance account has fewer features, is more restrictive of the consumer in any way, has a less favorable pricing plan, pays a lower rate of interest or is in any other way less attractive to the consumer, Yes.

If we use Chexsystem, but are not using the score that is provided to determine whether or not to open an account of any type of account, are we required to put the score on the adverse action notice. We do not use the score what so ever for our decision, we are using history on the report such as account closures,etc.

Similar question:

http://www.bankersonline.com/forum/ubbth...rue#Post1960705