Academic journal article ABA Banking Journal

It's the Use of Consumer Reports That Triggers Rights

Academic journal article ABA Banking Journal

It's the Use of Consumer Reports That Triggers Rights

Article excerpt

Q. If I have a permissible purpose and pull a "consumer" report for an applicant in connection with a business-purpose transaction, would I need to provide the Fair Credit Reporting Act's adverse action notice if the application was denied based on that consumer report? Or can I just send an Adverse Action Notice to the business?

A. When there are two applicants (even in the case of a business and a consumer) a creditor cannot send a combined Equal Credit Opportunity Act/Fair Credit Reporting Act adverse action notification to only the business if the application is denied, even in part, based on information in a co-applicant's consumer report.

In the circumstance where the consumer is a co-applicant, he or she has been the subject of "adverse action" and must be provided his or her own separate notification. The consumer's role in the application--primary applicant, co-signer, co-applicant, or the like--is not a relevant consideration, nor is the fact that the consumer report is obtained in connection with a business credit application. …

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