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Can We Discuss the Details?

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Question: 
When a loan is denied because of negative information in a spouse's or co-signer's credit report, can we discuss the details of the spouse's or co-applicant's report with the loan applicant?
Answer: 

Only to the extent the loan is being denied. Reg. B requires you to give the applicant specific reasons for the denial. If that reason is due to a co-signer's repossession, you may disclose that to the applicant. However, it would be my opinion you should not discuss any other factors of the credit report that is not used as a reason for denial.

FEDERAL RESERVE SYSTEM
12 CFR Part 202
[Regulation B; Docket No. R-1008]
EQUAL CREDIT OPPORTUNITY
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.

Many commenters were concerned about the co-applicant’s or guarantor’s privacy when the reasons for adverse action pertaining to creditworthiness are given to the primary applicant. When a person agrees to be a co-applicant, guarantor, or similar party, however, there is (or should be) a general understanding that information will be shared. Accordingly, the rule has been adopted as proposed.

First published on BankersOnline.com 11/21/2005

First published on 11/21/2005

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