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#793127 - 08/10/07 10:06 PM "Soft pull" vs "Hard pull"
M Cockrell Offline
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M Cockrell
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Dallas, TX
Is there a distinction for a "Soft pull" vs a "Hard pull" on a credit/consumer report? What, if anything, might delineate the two?

For example, if new DDA customers are "pre-screened" for a debit card, LOC, etc., and not approved based on a minimum score requirement, are they entitled to an FCRA adverse action notice?
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#793173 - 08/11/07 01:30 PM Re: "Soft pull" vs "Hard pull" M Cockrell
rlcarey Online
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rlcarey
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Galveston, TX
What is the definition of a "soft-pull" and a "hard-pull"?

If you are pulling Credit Reports for marketing purposes, it is not a permissible purpose, no matter what type of pull it is. Unless it is done through a pre-screened list, which is the only permissible marketing route and then only for credit products.
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#793337 - 08/13/07 02:37 PM Re: "Soft pull" vs "Hard pull" rlcarey
M Cockrell Offline
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M Cockrell
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Dallas, TX
Randy, I apologize as I apparently did not convey my question very well.

This is not a marketing situation, but rather a transaction initiated by the customer to open an account and apply for a debit card.

FCRA 603, subsection (d)(1), pretty much defines a consumer report as "any information by a consumer reporting agency bearing on a consumer's credit worthiness..." However, subsection (k)(1)(A) defers to ECOA 701(d)(6) for the definition of adverse action. Under this definition, ECOA repeatedly refers to "credit" and does not reference "debit" at all.

I was reading today's BOL WEEKLY Banker Briefing (always very informative, BTW) and ran across the articles in the Compliance Section entitled Account Declined - Adverse Action Notice and Pull a Credit Report for an Account. These articles lead me to believe the notice would be required, even though this isn't a credit product and would supposedly not be listed on the bureau's future reports as an actual inquiry.

Ultimately, if a "soft pull" (through Experian's TransAct software) truly does not appear as an inquiry, but it does not result in an approval either, does that still entitle the customer to an FCRA AAN?
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#793373 - 08/13/07 03:04 PM Re: "Soft pull" vs "Hard pull" M Cockrell
M Cockrell Offline
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M Cockrell
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Dallas, TX
How are other banks handling this?

If you prefer, you can PM me.
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#793893 - 08/14/07 12:01 AM Re: "Soft pull" vs "Hard pull" M Cockrell
rlcarey Online
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Well, if they apply for an account and you deny them, you owe them a FCRA notice, even for a debit card or deposit account.

603(k)(1)(B)(iv) an action taken or determination that is

(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 604(a)(3)(F)(ii) [ยง 1681b]; and

(II) adverse to the interests of the consumer.

What threw me in your first post was the use of the term "pre-screen". If you are "pre-screen"ing consumers, you do not have an application.

I am not familiar with Experian's TransAct software so I am not sure how that plays into the equation.

Some Credit Bureaus sell products that will "pre-screen" one customer at a time. If they pass, you have to offer them a firm offer of credit. If they don't pass, then there is no adverse action as there is no application for a product.

However, I do not think that you can pre-screen customers for anything other than credit or insurance products, i.e. debit cards. See 604(c).
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#794078 - 08/14/07 02:22 PM Re: "Soft pull" vs "Hard pull" rlcarey
ToTo Offline
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"Some Credit Bureaus sell products that will 'pre-screen' one customer at a time. If they pass, you have to offer them a firm offer of credit."

If they pass, and you offer the product, do you think that you also have to give them the "pre-screen" opt out notices?

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#794176 - 08/14/07 03:22 PM Re: "Soft pull" vs "Hard pull" rlcarey
M Cockrell Offline
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M Cockrell
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Dallas, TX
I don't mean to overly prolong this discussion, but...

If we are indeed using TransAct to "'pre-screen' one customer at a time," I'm confused. The FTC's Keller-Stinneford Letter refers to "the context of a credit application" and FCRA defers its definition of adverse action to ECOA 701(d)(6), which only references credit. I understand how this would require an FCRA AAN for a denied LOC, but how does an app for a DDA or even a debit card warrant the notice?

Also, just as you suggested, if TransAct is functioning as believed, this so-called "soft pull" process is only done as customers apply for an account AND specify on the application their desire for a debit card and/or ODP LOC. Without their indication, there'd really be no purpose for us to inquire about their credit ("soft pull" or otherwise).

So, if the client actually "initiates" the transaction, as opposed to the FI automatically "pre-screening" each applicant, is that what triggers the notice (even if it's not a "credit" product)?
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#794646 - 08/14/07 08:58 PM Re: "Soft pull" vs "Hard pull" M Cockrell
rlcarey Online
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ToTo: I think that it would be required under 615(d).

MC: "FCRA defers its definition of adverse action to ECOA 701(d)(6), which only references credit." However the FCRA expands on the definition - see 603(k)(1)(B)(iv) that I quoted above.

"So, if the client actually "initiates" the transaction, as opposed to the FI automatically "pre-screening" each applicant, is that what triggers the notice (even if it's not a "credit" product)? "

Yes, that would be correct. They applied and adverse action was taken.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#794725 - 08/14/07 09:49 PM Re: "Soft pull" vs "Hard pull" rlcarey
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,046
Dallas, TX
That's what I figured, but I was also praying for you to say, "Pay no attention to the man behind the curtain." Then, I'd just click my ruby red slippers together three times and I'd be magically transported back to Kansas (AKA Utopia: a world free of compliance citings).

It was ToTo that started this whole thing!

Oh, well. Is it Friday, yet?
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