2 part question: #1 When an inquiry reveals a reason for an adverse action notice can we disclose to the applicant information such as unpaid balance at ABC Bank? Or can we only disclose unpaid balance at another FI?
#2 business signers that we chose to perform the Chex Systems inquiry comes back as decline. We give the signer the AAN. How much if any information can we disclose the business if they question why we are not allowing signatory power to their employee?

Your bank's goal is to avoid meeting the definition of a consumer reporting agency at all costs.

1) The system is designed to encourage the consumer to contact the negative data base to verify that the information they are reporting is correct. There is simply no reason for your bank to relate the specifics to the consumer.

2) First, ask yourself why you are running a mere signatory through a negative data base. If he's signing on an entity's account it's the entity that is liable on the check, not the individual. As to how much you can share with the employer, if you want to avoid becoming a consumer reporting agency, the answer is: "Nothing." I could pretty easily make the argument that by turning my employee down you have already suggested that he has some financial issue that I have no real right to know about.

Thread from 2005

I also hope you are getting written permission from the business signer to pull a credit report on them as you have no other permissible purpose to pull a credit report on them under the FCRA.

First time I have heard this opinion before. Would reading/telling someone that XYZ Bank reported a OD balance make my bank a consumer reporting agency? That seems like a stretch, doesn't it?

We have always held the same opinion as Ken. We do not release ANY information contained on the credit report to the consumer, that's the job of the credit reporting agency. The documentation that banks are regulated to provide is sufficient for them to go it on their own.

Also, the last thing we want to do is get into any protracted conversations with the consumer as to the accuracy of the information on their report. If they contact the agency and get the information corrected, they can always re-apply.

I am a little confused, isn't ChexSystems rather different than a credit report?

Chex is subject to the FCRA and users of it governed by the FCRA.

Ah, okay. Thanks! I had never heard it refered to as a credit report.

Chex Systems is a type of credit reporting agency. It is not a nationwide credit reporting agency like Experian, TransUnion, etc.

Would anyone like to share how your business account disclosure address autjorized signers?

You are saying that we provide the AAN but not include the specifics. Does this qualify as specific?: •
State Statutes and/or Financial Institution policies require that we cannot open your account at the present time due to the following reasons: You had a checking account or other transaction account at our or another financial institution closed without your consent due to dishonored checks within 12 months immediately preceding the application.

That's pretty specific to me. What they are entitled to under the FCRA is the fact you're declining the request based in whole or in part on information obtained from ...

I agree with John. While it is tempting to disclose the reason that is provided by Chex Systems you must not do it.

Chex is subject to the FCRA and users of it governed by the FCRA. Therefore the notice must include up to 4 key factors that adversely affected the consumers credit score. So if we use Chex but there is no credit score we are not allowed to give reasons.

Let's be real. If you deny the new account request and you inform the applicant that the decision was based on a Chex report, they know what the reason was (unless Chex reported bad info).

So I'm a little confused. We use Chex, however, pay no attention to the Qualifile Score. We base our account opening decision on what has been reported, i.e. account abuse, charge-off's, etc. We have been using the short form for our AA simply stating that we based our decision from information reported from Chex and supply them with contact information at Chex on how they can get a copy of their report. We don't list any details of what the report stated. Should we be using the longer AA notice that states the credit score and the key factors that adversely affected their score?

Anyone? Thanks!!! :-)

Why are you paying extra for the score if you are not using it?

I believe it's included in our cost.

I highly doubt it from my understanding . Don't get things you don't use.

The Qualifile does provide us with other information that we do use such as accounts closed for NSF's, account abuse, validation of SSN, etc. We just do not pay any attention to the actual score number.

That aside, do you know what form we should be using?

We just do not pay any attention to the actual score number.

Good luck convincing the regulators on that one. Like I said, if you don't use it, get rid of it. You are paying for a service that you are "not using".

As far as a form, see this:

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

They published this after emphatically stating that their score was not a credit report covered under these provisions of the FCRA and were eventually called to task for it.

We are using the Qualifile information such as account abuse, negative closures, charge off's, etc. so we would not want to get rid of it.

Thank you for the link.

I'm not saying get rid of ChexSystems.

What I am telling you is that obtaining a Qualifile score is a separate product from FIS that you are apparently paying for that you insist you do not use. I am saying to quit ordering it and save yourself from having to explain this position that you are taking (we get it but don't use it) and quit paying for it.

I know plenty of banks that use ChexSystems and get all the information you say you need without getting a Qualifile score.

If we deny the account based on the QualiFile Score must we give them the adverse action from with the score written? Is the QualiFile score an actual credit score that you would get if you pulled a credit report?