Hello,

We have been finding credit reports from another lender in our mortgage files. What is happening is the borrower brings in a credit report obtained from another lender and the LO uses it to "get a general understanding" of the consumer's credit situation. However, there have been instances when the LO denied the credit based on the other lender's credit report. As the application is moved through the pipeline the LO pulls a credit report from the bank. We cited the use as another lender's credit report as an FCRA finding and our recommendation is that we do not allow for the use of another lender's credit report. But, we are getting pushback from our LOs, they indicate that other lenders are allowing for the use of another bank's credit reports.

I wanted to see if any one else has come across this issue?

Yeah, We have had lenders tell us the same thing. I always ask for the name of the bank and lender that uses this practice so I can ask them directly. It's amazing how quickly that ends the argument.

stand your ground.

And so you can report them, right?

If another bank is stupid enough to give the consumer a copy of the report the bank pulled - the consumer can do anything that they want with that report. The validity of the report from your bank's perspective is actually nil. So, explain to me what the problem might be??

The problem might come as prescreening - if it morphs into where the LO looks at a credit report, informs the customer that they would be wasting their time applying (or whatever the polite terminology is) and there is no application or other record (such as Adverse Action Notice). There is no real way to control the situation if the potential applicant comes in with a credit report and asks the LO if they would qualify. It would be a rather large fair lending issue though.

Yes - prescreening would be a potential issue, but the OP was talking about writing this up as a FCRA violation.

We cited section 604(a)(3)(A) - Any CRA may furnish a consumer report under the following circumstances and no other:

(3) To a person which it has reason to believe:

(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer;

Based on this, after much research it was determined the bank can only use a credit report for the purpose for it was requested and since we did not request it to begin with, it is not the bank's report and the bank cannot reuse it.

The CRA did not furnish the report to the bank - the applicant did.