Are we required to make note of this on the Adverse Action Notice?

Question:  We pulled a credit report and although the applicant’s credit history is not good, we did not use the applicant’s poor credit history in our decision to deny the loan request.

 

Are we required to make note of this on the Adverse Action Notice?

 

Answer:  Technically, no.  If you truly didn’t use the credit report or the credit score in your decision to deny the request for credit, you don’t have to give the applicant the FCRA Statement or the Credit Score Information disclosures.  Keep in mind; however, that “use” of a credit report can be interpreted in different ways.  An examiner could try to argue that having a poor credit report in the file could have contributed in some way to your decision.  It’s recommended you document your file thoroughly in these instances.

 

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Published
2019/05/21

 
David Dickinson

David Dickinson

David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.

He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.

David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.

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