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Pulling a Credit Report on an Existing Checking Account Customer

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Question: 
Is a bank allowed to run a credit report on a customer whose only relationship with the bank is an existing checking account? The account has been open for 5 years and been in good standing.
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." 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. [See section 604(a)(3)(f)].In fact, here's a quote from the Act:

"The section does not require that the user provide any kind of advanced notification to consumers before a consumer report is obtained." [Section 615(c)(2)].

If you take adverse action on the customer because of the information you gained from the consumer report, you must provide a written notice to the consumer.

First published on BankersOnline.com 6/17/02

First published on 06/17/2002

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