Does one need authorization from a consumer if the Bank has a permissible business purpose in running the credit?

Lets say a Loan Officer takes an application over the phone when applying for a mortgage. Obviously there is no written authorization to run credit. The consumer gave the loan officer their SS# as that is part of an "application". According to the CFPB, the purpose of having the SS# as part of the application is to obtain a credit report.

I am being told that we need specific authorization to run credit. My contention is that the application is the authorization as we now have a business purpose to run it according to 604(a)(3). I was then asked why is it written on the application if it is not needed and my answer was fluff. I have searched and see other places have the loan officer place a certification in loan files that states that they received verbal authorization to run the credit but I see nothing in the regulations requiring it.

Can someone point me in the right direction or let me know how your Bank handles such applications. Thank you.

We run it when we receive a phone application.

Do you loan officers specifically ask for authorization and then complete a certification to be placed in the loan file? I personally do not see where it is needed but I see from a simple Google search that is what some are doing.

Consumer Authorization vs Business Purpose

Consumer requests for credit do not require specific written authorization. The request for credit is your permissible purpose to obtain their consumer report.

Business purpose requests - unless the individual is going to be personally liable for the business debt you do not have a permissible purpose to obtain the individual's consumer report.

Very clear cut. Glad I am on the same page. Thank you.