We are currently working with the credit bureau to set up an account for us to be able generate soft pulls for our commercial loans. The soft pull is for simply for our credit ananlyst to determine continued repayment ability, etc... So, I would not think that the credit score disclosure would be necessary to incorporate with the report since we are not making a credit decision.

Can someone confirm this for me?

Thanks

What happens if the customer's credit bureau indicates that they don't have the continued repayment ability?

Skittles, that is a good question. I would have to find out if that even happens but it sounds like we should include it in case this were to happen.

Are these individuals all personally liable on the commercial loans?

rlcary, the majority of the loans would have individuals guaranteeing the loan.

the majority of the loans

My point is that if they are not personally liable on the loan, you have no permissible purpose.

rlcarey, I see where you are coming from. I inquired with the lending department and found out that we do have guarantors on business loans. The credit that is pulled is for commercial annual reviews with no new money. At this stage of the game we would not be denying the loan because it's already on the books.

Now, if we were making a new loan we would do a hard pull and have the disclosures necessary. So, with this soft pull I don't feel it's necessary to have the disclosures.

Is it more of a bank procedure whether or not to do soft or hard pulls of credit?

You don't have a permissible purpose without personal liability for a hard or a soft pull without specific written authorization. I am not even sure you have the right to pull credit for monitoring purposes on a commercial loan.

In a 1999 letter, the staff opined on this issue in the context of closed-end credit transactions. Because the terms of closed-end credit transactions are generally predetermined and thus may not be changed unilaterally by the creditor, the staff opined that the creditor in that instance did not have a “review” permissible purpose. FTC Informal Staff Opinion Letter, Apr. 9, 1999

rlclarey, the loans being reviewed are revolving lines for operating expenses say for farmers and businesses that annually turn in financial statements to the institution. Not sure if that makes a difference.

Well that helps on that issue.

rlcarey, thanks again for your response. I think the pealing ugly sign will go in my credenza until further notice....haha