For small business loan applications, if a blended score is obtained from a credit bureau (blends both a business score and a consumer score for the owner), and we deny the loan application based on that blended score, would we have to provide the FCRA adverse action notice requirements (score, date, key factors, range), since the blended score does incorporate information from the consumer's credit report or would we just send the Reg. B adverse action notice?

Who is the loan being made too - an actual business entity??

There would two different scenarios. It could where the applicant is the business and the owner is a guarantor. It could also be where the applicant is the sole proprietor business and there is no guarantor.

How does a sole prop have a business score, as it is a fictitious entity?

I'm not sure I understand why you say it is a fictitious entity. Sometimes if the business is new, they may not have a business credit history. Regardless, if the loan applicant is the business, would we need to include the FCRA requirements in the AAN when the blended score is used in the decision to deny?

If you are loaning to a fictitious name entity and not to the actual sole prop directly, who may have the assumed name certificate - you need to be talking to your attorney. If I am Joe Jones dba Joe's Plumbing - Joe's Plumbing does not exist. My question was, how does Joe's Plumbing get a business score?

Can you respond to my original question assuming we are talking about an LLC or incorporated business?

You are not taking adverse action on a consumer.

Sec. 615. Requirements on users of consumer reports

(a) Duties of users taking adverse actions on the basis of information contained in consumer reports. If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall:

So given that information, you would never include the FCRA AAN requirements for any business loan application where you are taking adverse action based on information from the blended score?

FCRA requirements apply to credit or insurance requests that are primarily for a personal, family or household purpose. See 603(d)(1)(A).

I ran across this article from the Consumer Compliance Outlook, which is specifically talking about regulatory requirements for business/commercial loans (https://consumercomplianceoutlook.org/20...s-and-services/). In the FCRA section, it says that the adverse action notice requirements would in some situations be required on a business/commercial loan. It says "The FCRA may so apply when a creditor pulls a credit report on a consumer who is or could be liable for a commercial loan (for example, the consumer is the principal of a business and the creditor wants the consumer to be a guarantor or coapplicant on the loan) and takes adverse action based on the report."

As to my original questions regarding what they were doing when they had a sole proprietor as the applicant.