Credit Card - Dormant or Limited Activity

Posted By: Crazy in Compliance

Credit Card - Dormant or Limited Activity - 11/02/20 01:46 PM

Has anyone closed a customer's credit card account based on limited activity or no activity for over a year? We are thinking about contacting the customer to see if they would like to keep it open, reduce the credit limit by 50% or close the account. If they don't respond, we would like to close the account, but not sure what type of reason to use. Our account disclosures do not address non-use of activity. If your institution has done something similar, what type of adverse action reason did you use (assuming no new underwriting was conducted)? Thanking you in advance ~
Posted By: rlcarey

Re: Credit Card - Dormant or Limited Activity - 11/02/20 01:58 PM

Do you have something like this in your agreement? "We may close or suspend your account. Sometimes we close accounts based not on your actions or inactions, but on our business needs".

If you are not basing the decision on the individual account holder and only inactivity, then it is not adverse action.

1002.2(c)(2) The term does not include:

(ii) Any action or forbearance relating to an account taken in connection with inactivity, default, or delinquency as to that account;
Posted By: Crazy in Compliance

Re: Credit Card - Dormant or Limited Activity - 11/02/20 02:05 PM

Thank you so much!