Answer:
A bank can obtain a consumer report for any legitimate business need that is initiated by the consumer or to review an account to determine whether the consumer continues to meet the terms of the account [Section604(a)(3)(F) - page 6607]. Legitimate business needs include credit transactions, review or collection of an account, opening a deposit or savings account or underwriting of insurance. You must have written authorization to request a consumer report for employment purposes, but that's another story.
Although there is no legal requirement to get the consumer’s permission or signature to allow the bank to pull a consumer report (with the exception of a report for employment purposes), the bank could expose itself to civil liability if the consumer contends that the bank did not have a legitimate business need that was initiated by the consumer. Therefore, I have always recommended you have a signed application, signature card or other documentation to justify your business need for the consumer report. Written permission would not be practical with regard to pulling a consumer report to monitor an account, however.
First published on BankersOnline.com 7/07/08
print
share