If the reason for denying credit is for a reason not found on a credit report (insufficient collateral) but a credit report was obtained, is it OK to list the credit report's name and contact info on the adverse action notice? I couldn't find in Reg. B where you couldn't, but I may have missed it.

Thanks!

This came up for me yesterday, because of the way our system is we have the default of the credit report info on all of our adverse action notices. After seeking guidance we have decided to continue doing this because we are actually over disclosing. That's not to say that we could get an examainer that does not agree.

If you deny them for information received on a credit report, you include the CRA information. This is so they can go back and

1 - get a copy of the credit report so they can
2 - dispute anything that they feel is incorrect

The checked box indicates that part of the denial reason is for information received from a credit reporting agency. That would be an incorrect statement if they were not denied for credit.

That's what our auditors have said - If the credit report had nothing to do with the denial then the credit bureau info should not be included.

Like Soccer, our system defaults to include, so we have to be sure to remove it for those denials that don't need it.

You are going find that a majority of examiners are not going to agree and I consistly see banks written up in regulatory examinations on this issue. You are not "over disclosing", you are granting rights to the consumer under the FCRA that they do not have as the credit report did not contribute to your decision.

If a credit bureau delivers a free credit report based on your having incorrectly checked off that box, it adds to the credit bureau's costs, which it passes along to its subscribers -- like your bank.

Not to mention the confusion factor.

I have seen Adverse Action forms with two boxes.

One box indicates that information from the credit report contributed to the decision, and the credit bureau information is provided below.

The other box indicates that while a credit report was obtained from the credit bureau listed below, it did not contribute to the decision.

We have only one box (the box to check to indicate that information IN the credit report was used as a basis for the denial), but what about the credit bureau information just being printed on the report (without the box checked)? I see this rarely, and i'm sure it's best practice for it not to be on there at all, but would the information being there alone without the box checked be a violation?

Yikes! I'm glad I spoke my intentions. I am in the process of correcting the situation. As I look at the reg I am going to site 202.9 (a)(2)(i)"Statement of specific reasons for the action taken" Does everyone agree that is correct?

Thanks again!

Under what circumstances does this situation arise?