FCRA and credit report uses

This is a question regarding uses of credit reports. We pull a credit report when a customer makes application for deposit account. Based upon a scoring software there is a cover document that either says Yes or No for approval. It may also say Yes or No for consumer loan approval. Though the customer is not applying for a loan this may be used to ask the customer if they want a loan.

My reading of the FCRA is that you can't do this. The customer has to make application (written or oral) for the product and then the credit report can be used. Is this correct? Since cross-selling is big these days it seems hard to believe that I am correct.

Thanks,

Michael

Read the Gowan letter. I believe you are on the right track.

I think the way to get around this is to ask the customer up front if he/she is interested in being qualified for a loan product at the same time the account is established. This is a perfect opportunity to cross sell overdraft protection, credit cards- whatever. If the customer says "yes" then the bank has a "request" for credit and can proceed to qualify the customer for both the credit and the deposit product. However, the downside to this is that the bank would have to generate an AAN if the customer did not qualify for the loan product, the deposit product, or both.
BC