adverse action notices

Posted By: Anonymous

adverse action notices - 02/07/01 02:27 PM

Are we required to send adverse action notices if we deny a customer a debit card based on the fact that they have had a large number of nsf checks? Also, what if they have a card and we decide to "kill" it due to repeat overdrawing of the account?
Posted By: Andy_Z

Re: adverse action notices - 02/07/01 02:56 PM

Adverse action notices under Reg. B apply to credit and the refusal to grant credit. If these do not involve OD lines you should be OK.

FCRA may come into play depending on how you find out about the NSFs. If this is from a CRA such as TeleCheck or Chex Systems you will have a disclosure to make, but it isn't your typical adverse action notice.

Andy Zavoina
Opinions stated are not necessarily that of my employer.

[This message has been edited by Andy Z (edited 02-07-2001).]

Posted By: John Burnett

Re: adverse action notices - 02/08/01 03:11 PM

. . . and, to answer the rest of your question, if the excess overdraft information is based on your own bank's experience with the customer, the FCRA doesn't come into play.

Ditto on "killing" a debit card due to experience. I think your steps here are (1) "hot list" or otherwise disable the card in order to stanch the flow of overdrafts; (2) notify the customer of your action, including the reason [this isn't a regulatory rule, but probably required from a customer-relations perspective]; and [maybe](3) figure out if there's a pattern that points to loose issuing practices.