Hello, if a Bank reports borrowers of SBA-guaranteed loans to the commercial credit reporting agencies, is the negative information reporting disclosure required? I see it as a best practice but do not see it as a requirement - thoughts? Thanks!

It is one of those regulatory chains that you have to trace back.

Sec 623(a)(7) refers to "customer" and points to the Privacy Statute with the GLBA.

So, if you go to the privacy regulations, customer means a consumer and a consumer means:

an individual who obtains or has obtained a financial product or service from you that is to be used primarily for personal, family, or household purposes, or that individual's legal representative.

So, reporting in relationship to a SBA loan would not be covered.

Thank you Randy! If the notice is not required, any thoughts on using it as a best practice? I'm thinking it might be useful in thwarting future complaints. Wondering what others do. Thanks!

I would not lose any sleep over it unless it automatically shows up on your past due notices - how do you plan on delivering it?

Thank you, adding to statement or delinquency notice is a possibility. Another question - if sole proprietors are reported to the commercial CRA's under their individual social security numbers, is it possible for that information to cross over and show on their consumer credit report? Thanks again!

That is a question for your credit bureaus. I can't imagine that commercial and consumer credit bureaus communicate with each other.