This was outside of the scope of the audit I am doing, but I couldn't help noticing that our processing staff is pulling CB reports prior to our getting the assignment of a dealer note.

It looks to me like we are pulling the report for them to underwrite, they do the Note and assign to us, and then we are filing the primary lien.

I think we do not have a legitimate purpose in pulling the report .....besides, aren't we functioning outside of our arrangement with credit reporting agencies when we start reporting credit to a third party?

Mgmt thinks our dealer arrangement is our cover.

Am I right in searching the FCRA for ammo in my favor?

If the bank does not have an application at the time they pull the report, then you have no permissible purpose.

What happens if the dealer does not think that the borrower qualifies - do you ever get the package?

I think you are turning the bank into a CRA and are in violation of your CRA agreement.

You might find the following article helpful. It is from the FDIC Supervisory Insights, Summer 2005 edition. Be sure to carefully read the 2nd to last section entitled "Compliance Considerations . . .": http://www.fdic.gov/regulations/examinat...to_lending.html