Where an individual applies for business credit, the business has gross revenues under $1MM, a consumer report is obtained, and the application is denied, must the lender disclose the key factors that impacted the credit score if they provide a written AAN to the applicant?

1002.9(a) doesn’t require it, but the model form includes credit score info. Commentary to 1002.9(b)(2) #9 seems to indicate that the key factors impacting the credit score should be stated, but it specifically references “consumer” when discussing the topic. To further complicate the issues, Reg. B defines consumer credit as credit extended to a natural person primarily for personal, family, or household purposes. FCRA, on the other hand, defines consumer as a natural person.

I’m leaning toward “either way is compliant”, but I’d like some intelligent thoughts.

What is the relationship of the individual to the credit? Are they (individually) the credit applicant??

Individual is the business owner and only applicant.

If the individual is applying for credit as an individual (rather than the business entity applying and the individual providing some sort of guarantee), then you are taking adverse action against the individual and you owe them the proper disclosures. The key is the applicant as the FCRA differentiate much between business and consumer credit like, for example, Regulation Z.

Thanks, Mr. Carey!