I'm working on all new forms and disclosures. The bank plans to begin reporting charged off deposit accounts to the [three] national credit bureaus. Will this then trigger the Negative Information Notice at account opening? If so, should it be signed and a copy retained? I recall reading an earlier thread where DanP said his bank was getting the notices acknowledged at loan closing, even though there is no regulatory requirement to do so.

623(a)(7) Negative Information

(A) Notice to Consumer Required

(i) In general. If any financial institution that extends credit and regularly and in the ordinary course of business furnishes information to a consumer reporting agency described in section 603(p) furnishes negative information to such an agency regarding credit extended to a customer, the financial institution shall provide a notice of such furnishing of negative information, in writing, to the customer.


For this purpose, I realize that ChexSystems does not qualify under 603(p) as one of the big three.

You are going to the about the only bank in the nation that is going to choose to do this.

You would be required to send the notices.

My thoughts exactly, Randy! Plus, if you report you're subject to the accuracy and updating provisions.

Now, you stated: You would be required to send the notices. Please clarify. Does that mean providing the model notice at account opening is not sufficient? Or would we be required to send a notice when negative info has already been reported--once the account has been charged off?

Thanks for the feedback!

It depends on how you want to read the regulation:

623(a)(7)(B) Time of Notice

(i) In general. The notice required under subparagraph (A) shall be provided to the customer prior to, or no later than 30 days after, furnishing the negative information to a consumer reporting agency described in section 603(p).

(ii) Coordination with new account disclosures. If the notice is provided to the customer prior to furnishing the negative information to a consumer reporting agency, the notice may not be included in the initial disclosures provided under section 127(a) of the Truth in Lending Act.

Some people think that (B)(ii) is a statement that delivery at account opening doesn't cut it, even if delivered separately from a TILA disclosure.

Also, not only do you have to worry about upfront data integrity, but you will have to make sure that you absolutely report them all (Reg. B) issue and have the systems in place to update the charge-off records when customer make any payments on the charged-off deposit account.

Someone needs to do a cost benefit analysis on this decision. What is in it for the bank, beside the additional costs? Punishing the consumer is only going to give your bank a black-eye. That is why there is ChexSystems.

It shows I'm signed in Randy so I can now post here...

I wanted to make sure that this only applies if you report deposit information to the Big 3.....NOT reporting to ChexSystems...

I saw this notice in another bank's brochure and wanted to make sure we weren't supposed to be disclosing this...

We only report negative information to ChexSystems....

If all you are dealing with is ChexSystems, that is correct. That notice will not apply. You have to be reporting to the big three.