Answer by Jim Bedsole:The Fair Credit Reporting Act does provide that if you give the credit information to a third party, you become a credit reporting agency and subject to additional requirements. But the customer is not a third party.
You may want to check your contractual agreement with your credit bureau. There may be stipulations in there preventing you from sharing the report.
With the adverse action letter from you, the consumer will be able to receive a copy of the credit report directly from the credit bureau. That's probably the easiest solution and keeps the bank from being involved in the middle of potentially disputed information.
Answer by John Burnett:You are free to show the applicant a copy of the report you obtained and explain it. As Jim notes above, your contract with the credit reporting agency may not permit you to give the applicant a copy. I would also suggest that you steer the applicant toward requested a free copy of the credit report directly from the reporting agency. The copy that the agencies provide consumers is more easily understood by the layperson than the report sent to lenders.
Answer by Andy Zavoina:If you look at the FCRA, focus on Section 607(c). When there is adverse action the user (you) is allowed to disclose the contents of the credit report to the consumer. The credit reporting agency may not prohibit this.
"Disclose" is not defined and I would opine that you could do this orally or in writing. Several other questions come up when you proceed though. What information is on that report that pertains to your bank, your subscriber information, etc. Do you want to give this out? And I would reiterate John's point. If the consumer wants to question someone's report, understand how to read it or contest it, that is better done with the CRA, not you. Refer them to the CRA where they'll get a consumer friendly copy and more answers.
First published on BankersOnline.com 11/27/06