Greetings,

How would you recommend that the following scenario be handled?

3 clients apply for a loan. 1 client stated he wants his personal information kept separate from the other 2 clients. The Sales Consultant stated that we can do that. (I will assume the SC was unaware that we can not separate the information) The application package was mailed out with all information together. It is received and read by the other 2 clients.

Is this a privacy incident? How would you recommend that we handle this?

Thank you in advance.

I think it depends on what was included. While there is no guarantee of privacy for co-applicants on a loan, you have a couple of issues. One, your employee entered into a verbal agreement not to share the information. Two, if the information shared with the other applicants goes beyond information that was pertenent to the credit transaction - i.e., anything that could be construed as trade secrets, etc.

Why do you mail an "application" package back to the applicants with all this information anyway??

Most of our loans are via phone, mail, fax.

Also, just to clarify, the co-applicants were the daughter & son-in-law. I imagine that he did not want them to know his financial status.

We have provided the applicant $600 towards closing fees & are considering writing a note to the borrower.

What do you think would be the best recourse?

Thanks.

If the application package only contained the application and other early disclosures, I don't think there is necessarily harm to the co-applicants. Just as long as they didn't have to send the info back to the SC in one package, you can keep the applications separate in the file (by person).

You'll want to make sure your FACTA notice is only mailed to the appropriate parties. And if you ask for confidential financial info from each co-applicant, you don't disclose that info to the other co-applicants.

The other consideration is that if the co-applicants are applying together, ECOA assumes if you tell one co-applicant "news" then all co-applicants receive the same "news."