I need help!!! We pull credit reports on anyone applying for a loan or for anyone who wishes to open an account with us (such as checking, savings, etc.). I just found out that our new accounts rep (who is new) is giving the customers a copy of their credit report if they request it. I thought this was a big no-no. What can we do? Is it wrong to give the customer a copy of their credit report or can we charge them the same fee that we are charged by the credit bureau and give it to them? Any help would be appreciated.

I am sure there will be some who disagree with me, so let the discussion begin! Unless it is a violation of your agreement with your credit bureau, you can give a copy of the credit report to your applicant. You cannot charge for the copy, as that makes you a credit reporting agency. As a matter of interest, most credit bureaus do prohibit your giving your applicant a copy of the report, but it is not a regulatory violation to do so.

Thank you for answering. I told them that if it said in the contract with our credit bureau that we cannot, then we cannot. I also didn't think that we could charge for that since technically we are not providing that service.

Unless I am mistaken, if a borrower requests( in writing) a copy of their credit report, you are required to provide them a copy of it.

No, the bank is not required to provide a copy. Even in the event of a loan decline, the customer may obtain a copy from the CRA.

There isn't a requirement to provide the credit report to the consumer, but neither is it prohibited. The credit bureaus used to prohibit giving the customer a copy so that they could sell one to the consumer. However, Congress ruled that out in some pre-FACT Act FCRA amendments.

The other problem that arises with this practice, is that the customer will then be reading a report meant for a bank, not a report meant for a consumer. The reports look very different. It is very likely that the customer would come back to you and ask for explainations which you may not be prepared to answer, as you did not generate the report. You should suggest that they get a free copy directly from the cra.

Check your state law. Our state law actually requires us to give a copy of a consumer credit report to the consumer under certain circumstances. They ask for it in writing, and they have paid for it....I think I am forgetting something else here. If you search the threads for this topic you will see that this has been discussed many times and people fall on both sides of this debate.

State laws can always be a bit more particular. While we have dedicated forums for state issues and don't encourage their discussion here (broader audience) mentioning the state can be helpful. Then a reader could go to that state forum for more information if they wanted.

Where can I find regulatory guidance "blessing" a bank's right to provide a free credit report to a consumer?

The FTC iterated this fact in the 1990 commentary to the FCRA under Section 604 - General:

3. User's Disclosure of Report to Subject Consumer

The FCRA does not prohibit a consumer report user from giving a copy of the report, or otherwise disclosing it, to the consumer who is the subject of the report.

However, most credit bureau contracts still prohibit the bank from doing this unless required by some other law. With the advent of free credit reports through the internet, I'm not sure why any bank would choose to voluntarily give reports away.

Do you know where I can find that commentary?

Thank you!

There is nothing wrong with providing the consumer a copy of the consumer's own credit report. In fact, they have a right to request it.

It is true that the CRAs have historically had subscriber contract provisions making subscribers promise not to show the subscriber version credit report copies to the consumer/applicant. The FTC addressed, in an Informal Staff Op Letter, a question from a subscriber as to whether it violated law to allow the consumer to see it or have a copy. The FTC said it is not illegal. The question is whether the provision is contra bonos mores [against public policy] and ought to be illegal if enforced against a subscriber. Though the consumer might lack standing, the subscriber may be wrongfully cut off from services by the CRA for other ostensibly legitimate reasons after-the-fact. Some subscribers still sell to the consumer. Recently I addressed this issue when speaking to a
Bar group. A former FTC lawyer claimed that no such contractual provisions existed. I offered to show her a contract on the spot and she backed down.

The problem is that the CRAs sell a different report to the subscriber than the consumer. The consumer version has LESS information contrary to CRA industry's claim to the contrary. They want to conceal the report and claim that you cannot prove your credit denial damage or defamation claim if you cannot get the lender to show you the report [or tell the truth about its contents]. The reason the reports differ goes back to the method of inquiry, in large part.

A "consumer disclosure" [credit report copy] is generated with "complete" ID info so the report is restrictive in content and presumably more accurate.

The subscriber version can be accessed through inputting minimal ID data.

Further, the matching program engaged for each is different. The disclosure program requires stricter matching compliance [points of correspondence], while the subscriber access is "looser" requiring less points.

What results is a 1681e[b] violation in the subscriber version report. The disclosure report, oddly, will comply with 1681g. Think about it.

David A. Szwak, Esq.
http://www.MyFairCredit.com
http://www.MyFairDebt.com

The FTC's Commentary on the Fair Credit Reporting Act specifically addresses your question in Section 604 - General number 3. User's Disclosure of Report to Subject Consumer ... "The FCRA does not prohibit a consumer report user from giving a copy of the report, or otherwise disclosing it, to the consumer who is the subject of the report." However, your Credit Reporting Agency may not allow you to provide a copy to your customer. Therefore, you will need to review your contract, or agreement, to verify.

Its been a while but back when I worked in the bank the main reason we were told not to provide a credit report to the consumer or help with any counseling other then corrections during the transaction through the agencies was mainly because our counsel told us that once we acted like or took on any agency responsibilities we inherited the credit agency liabilities. In other words we became the credit agency now and could be held liable by the consumer if mistakes were not cleared on the credit report by us or if did not follow the proper FCRA laws. I beleive this determination was made by legal after several consumer successfully sued other lenders in the country back then for FCRA issues and won. The financial institution that I worked for was the largerst in New England back then and had very competent legal and compliance people--------- 10 years and a few mergers later--------- the institution is now part of Bank of America.