Question:

When we get a pre-approval in the mail for a credit card. Is a credit report obtained because isn't that against FCRA or are they not obtaining a credit report?

They are operating under the pre-screen permissible purpose. See FCRA 604(c) Furnishing reports in connection with credit or insurance transactions that are not initiated by the consumer.

If you wish not to participate in pre-screen offers then follow the opt-out instructions included in the solicitation.

Anon, what the creditor is doing is putting together a list which the bureau matches - it may be something like:
Bureau opened at least 3 years
at least 3 items in the credit bureau
including 2 active credit cards with a line usage under 30%
No more than 1 60 day delinquency in 3 years, none in past year
maximum 2 x 30 days delinquent in past year
No bankruptcies or collections

They would make a firm offer to those passing the tests subject to ability to repay the debts

The bank needs to contact the credit agency to start a prescreen program?

The bank needs to contact the credit agency to start a prescreen program?

I would like to clarify this:

The bank wants to do a pre-approved/pre-qualify credit card program with our Private Bank customers and do a soft credit pull (does not affect credit score of customer) to do this.

With a "soft pull" is it necessary to perform any additional diligence or obtain any approvals from the client or anyone else to process the credit pull.

It will not be a mass mailing and will only be current deposit or lending customers of the bank.

I am worried about Reg B, FCRA issues. Any recommendations to look out for?

You cannot pull credit reports for marketing purposes. You would have to go through the "prescreening" process as earlier described. You have no permissible purpose for doing a "soft pull" on these consumers.

Are you saying there should be a formal prescreening process to do this? We are not marketing to non-customers just current customers.

Do we also need to contact the credit agency and Visa before we do start this?

Yes, you need a formal process. Again, you cannot use a traditional credit report to market products. You have to go through the prescreening process, regardless of whether they are your customer or not. Not sure why you would have to contact Visa, but I a not sure how you are going to put together your prescreened list without the involvement of your credit bureau. Then make sure you save all the documentation to support your offer to meet Regulation B requirements.

1002.12(b)(7) Prescreened solicitations. For 25 months after the date on which an offer of credit is made to potential customers (12 months for business credit, except as provided in paragraph (b)(5) of this section), the creditor shall retain in original form or a copy thereof:

(i) The text of any prescreened solicitation;

(ii) The list of criteria the creditor used to select potential recipients of the solicitation; and

(iii) Any correspondence related to complaints (formal or informal) about the solicitation.