I have gone back and looked at old posts addressing the requirement (or not) to provide the notice of negative information to co-signers. I'd like more current opinions please. We are automating our consumer loan documentation prep. Our vendor is emphatic that a "co-signer" does not need to receive the Notice of Negative Information (NNI) under Section 623 (a)(7) of FCRA. The vendor's logic is that this applies only to "parties that have requested credit".

They are not willing to budge on this. I'd like to be well informed when I go into another round of discussion with them tomorrow.

We have chosen to provide the notice at the time the new loan account is established. We do provide information on co-signers and guarantors for consumer-purpose credit to the credit bureaus. Hence, my opinion is that they should also receive the NNI.

Is there any loophole that excludes co-signers and guarantors from the provisions of the FCRA and FACT Act for purposes of this Notice? I am concerned about the definitions of "consumer" vs "customer" and how the two words are intermingled in the FCRA

Any comments would be greatly appreciated.

HELP, no takers on this question. I could really use some assistance.

Apparently no one has a new opinion. We, and will continue to, provide the notice to all parties to the loan.

If you are concerned about providing the notice to existing co-signers remember you have the option to either notify them before you report the information or within 30 days after reporting the information. If your system will not handle this notice then you will have to put internal procedures in place to provide the notices.

My understanding is that a customer under FCRA is the same as a customer under Privacy.

I believe I have read that the NCUA considered a cosigner/guarantor a customer, but I don't believe the other agencies do. But I haven't researched this one by one. Personally, I follow the credo of "when in doubt, disclose."