When an applicant applies for a mortgage loan the underwriter will also look at the possibility of qualifying the applicant for a HELOC based on the information on hand.

If they qualify a pre-approval letter will be presented to them at the loan closing by the MLO giving them 30 days to accept the offer. If they don’t qualify no offer of credit will be presented.

Although this is an unsolicited offer of credit it does not appear to meet the definition of a pre-screen offer under 1681(c) since the credit report was not obtained based on specific criteria furnished to the CRA. I know there may be some with concerns the report is being used for a purpose other than what it was obtained for. However putting that to the side would this pre-approval be subject to the prescreening requirements for a firm offer of credit and in particular the opt-out disclosure?

The pre-approval letter will state the offer is good for the 30 days and will be valid as long as no material change has taken place in their financial conditions such as a loss of job.

Bottom line is that you cannot use a credit report obtained for one reason to market other products, so your questions are rather moot.

Bottom line is I know the risk of using the report for a dual purpose and the question may be moot to you but it is not to me. I also am aware of potential fair lending issues.

My interpretation is the process is not a pre-screening and we therefore don't have to follow the firm offer of credit or the opt-out since we are not obtaining the report based on criteria sent to the credit agency to produce of list of potential applicants. All I'm asking is a second opinion on that interpretation.

It's like a dealer asking the police to recover his stolen merch. You're already outside the lines of what you can do, so you're probably not going to get an answer legitimizing the back end of it.

I am not sure how anyone can give you a second opinion when what you are doing is in direct violation of the FCRA and will also definitely violate your certification regarding permissible purpose use in your contract with your CRA . At that point, what difference does it make how you treat the situation?

You might want to pull out a copy of the Gowan letter: https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-gowen-04-29-99

While that addressed using credit reports pulled for review purposes, the same holds true for credit reports pulled for new loans.

It is hard to opinion when the entire premise of what you are proposing violates the law.

Can I ask a separate but related question? Does the creditor's name have to be listed in disclosures of a prescreened offer? For example if a lending marketplace, who partners with and offers loans from multiple FIs, gets a prescreened list with credit criteria that could result in a firm offer of credit from any of the lenders, can the proper disclosures not list a specific FI's name? The offers will be branded with the Marketplace's name in the headings, etc.

Can I ask a separate but related question? Does the creditor's name have to be listed in disclosures of a prescreened offer? For example if a lending marketplace, who partners with and offers loans from multiple FIs, gets a prescreened list with credit criteria that could result in a firm offer of credit from any of the lenders, can the proper disclosures not list a specific FI's name? The offers will be branded with the Marketplace's name in the headings, etc.

How can a third party perform prescreening for third party lenders. We would need a lot more information on how that was going to work. How can you present a firm offer of credit without identifying the lender?

We are not a lender, we are an online marketplace in which a consumer can come to our website and submit one application, and they get offered multiple rates and terms from multiple lenders.

We have partner lenders that we complete underwriting and decisioning for. Once we underwrite, approve, and get signed loan docs, the lender funds and owns the loan. We do not own or portfolio any loans.

We know each lender's exact underwriting overlays and therefore know how to set up prescreen parameters that would fit all partner lenders and know that each lender would give a firm offer of credit if the prescreen parameters are met and nothing is negative in addition to that. For example, we partner with 5 lenders and we know what credit score they will approve down to, the max loan amount, which states they operate in, if they have minimum income amount requirements, what their DTI max is, etc.

For fixed, unsecured personal loans, we are wondering if we can pull one prescreen list from the CRA based on parameters that match from multiple letters (meaning each lender will go down to 650 FICO, and up to $20,000 loan amount) and send letters with our name and logo at the top, and do not list any lender names in disclosures.

Or do we need to get one prescreen list for Lender A, and send a letter per Lender A's list with our name/logo at the top but Lender A's name in disclosures? In other words, do we need one list and letter for Bank of America, versus a different list and different letter for Navy FCU (not our real lenders), showing their names in the disclosures at the bottom of each letter.

And when I say disclosures, I mean the ones we provide in addition to the short and long form that are required by FCRA. It's a disclosure that includes this below and this is where we're wondering if we can have these disclosures without [lender's name].

"Terms and conditions apply. This does not constitute an actual commitment to lend or an offer to extend credit.

You have been pre-qualified based on certain credit criteria. Information contained in your credit report was used to qualify you for this offer. This offer is not guaranteed if you no longer meet lending criteria. Loan approval is subject to verification of residency status, monthly housing expense, income, debt-to-income ratio, credit information, and application information needed to meet the minimum requirements of [lender name’s] Personal Loan Program. The minimum aggregate loan amount is $600 and the maximum aggregate loan amount is $100,000. Personal loans offered through the Splash network may have an origination fee up to 8%, if any, which may be deducted from the loan proceeds.
Membership conditions may apply.

Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, creditworthiness, income, and other factors. Rates are subject to change without notice. We reserve the right to modify or withdraw the offer at any time."

Oops just replied to you but it says I replied to Anonymous so send this for visibility

You might want to visit with your banking partners - I would not touch that process with a ten-foot pole.