CREDIT RPT ON DISHONEST EMPLOYEE

Can anyone tell me if there is a way to legally pull a credit report on a lender whom we suspect is in trouble? We have never obtained written authorization from the employee to do so. Thanks for you assistance.

You can still get permission from him/her now, although I suspect you don't want to try to do that. I don't think you can pull one otherwise. Plus, what will it tell you? There are plenty of dishonest people in the world with not-too-bad credit reports. S/he may want to buy a big present for a friend....

A goal for 2004 - develop a written policy on it which is bank wide. Then execute the policy.

If you pull his credit report, it'll leave a "mark" showing your bank name on his credit report as a non-credit related request. This mark is the type shown when people apply for a job and authorize the prospective employer to assess an applicant's credit. If this is a critical-level matter, why aren't you handling it in an above-board manner? Have you involved bank counsel? Have you informed the employee and told him/her that you suspect a personal credit problem that may be affecting work performance? You're response plan is wobbily, and I'd immediately involve counsel. Things that you say, people you inform of your suspicions, and other acts you engage in related to this individual may all come back to haunt you bigtime if you can't support your theories. What if you run his credit report and the merchant or businesses don't report to the credit agencies? What if the credit report does not sustain your theories of a personal credit problem? Besides, the "dishonesty" that you reference, how can the credit report relate to your suspicions? Was his/her credit report inspected upon his/her hiring?

Consider this: our bank requires officers to submit a financial statement annually to the Chief Lending Officer for review. In addition, the statement itself has language authorizing the bank to pull credit in connection with this annual review. This is simply part of our employment with our bank. I can tell you that at least a couple of times, the CLO has been quite surprised by negative net worths of loan officers or by extensive credit card debt that could trigger additional audits of a particular employee. As an officer, I think this is a great practice. It only protects me so I am not in any way offended by it.

I agree with Bob. Anytime you are selective in any type of review, enforcement, etc., the person/entity is potentially exposing itself to litigation and reputational risk, and internal questions about who is looking at me and why. There could be some concern that review of financial statements is used to help determine pay raises.

Bank officers should be above-board in all credit dealings, but a financial statement is only one part of an evaluation. There may be an officer with high credit card debts and another with none. That does not alone evaluate honesty or need.