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FCRA Requirements-Adverse Action for Joint App

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Question: 
The Fair Credit Reporting Act requires that each applicant (assuming there is a co-applicant) receive an FCRA adverse action notice in the event of an adverse action. Assume that there is a joint application for an installment loan, not secured by real estate (auto loan for example). The loan is denied because after a review of the credit reports of both applicants, the primary applicant previously filed for bankruptcy and the co-applicant has delinquent obligations with creditors. Should each separate notice provided to the applicant and co-applicant only list the reasons specific to their own credit history? In other words, should the applicant's notice only reference the bankruptcy and the co-applicant's notice only reference the delinquent credit obligations? My reasoning for feeling this way is that 1. it protects the privacy of the applicant and co-applicant and 2. it will better inform the applicant and co-applicant of what specific reasons were used in their denial so that each individual may correct them in order to secure the credit in the future. I understand only one would need an ECOA notice but my concern comes specifically from FCRA notice requirements.
Answer: 

You are confusing the requirements of the FCRA and Regulation B. Regulation B requires that you provide specific reasons for the denial. The AANs, if you sent both applicants a Regulation B AAN, would list exactly the same reasons (bankruptcy, deliquency). The FCRA AAN does not require that you send specific reasons for the denial. There is no privacy concerns between the two parties as they voluntarily applied for joint credit.

First published on BankersOnline.com 3/4/13

First published on 03/04/2013

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