Other than the following scenario, our customers do not have any opt-out rights. We have an high-risk lending affiliate. We do not refer loans to this lender unless the applicant does not meet our lending standards. So the only time that we would refer a loan to the affiliate would be when we have turned down the application. I would like to know if we can give out a separate privacy disclosure to those applicants that we turndown so as to not confuse the rest of our customer base (they may think that they have something to opt-out of). I would also like to use an "opt-in" rather than an "opt-out" so that we have a signature authorizing us to share this information with our affiliate. This would be a Fair Credit Reporting issue rather than a privacy issue, so I'm not sure if this makes any difference.

Sounds like a good plan. I would investigate modifying the Adverse Action Notice something like:

We are unable to grant ... However, we believe our affiliate (Gougem Loans) will be able to assist you with your financing needs. If you would like us to forward your application package (including your credit report and other supporting documents) to them, please sign below and return a copy of this notice to us in the enclosed envelope.

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.