If you are producing an AAN based off non-credit related factors ex: insufficient collateral // clear credit history, my viewpoint is that neither of the FCRA boxes are triggered and the credit scoring information is not required to be disclosed.

With that being said, I am wondering if in a similar scenario in which an AAN was produced off the basis of insufficient collateral, there was credit related factors on the CR, but also reported on the initial application with no discrepancies'. Would the FCRA box be triggered or would it be null since we were informed before credit was pulled?

On the other hand, in a scenario in which negative factors were reported on the application but differed from the credit report then we would still include the FCRA box and CR info on the AAN?

From the official commentary: Section 1100F of the Dodd-Frank Act requires disclosure if a credit score was used in taking adverse action. A creditor that obtains a credit score and takes adverse action is required to disclose that score, unless the credit score played no role in the adverse action determination. If the credit score was a factor in the adverse action decision, even if it was not a significant factor, the creditor will have used the credit score for purposes of section 1100F of the Dodd-Frank Act.

If we pull credit and deny, we pretty much always provide the disclosures, but even if you aren't in that camp, if you are verifying the application information with CR, then how are you going to argue it played no role? That seems pretty cut and dry regardless of where you land on the pull=disclosure debate.

2 related questions:
1) If we run a credit report, but it comes back with no credit score because the applicant does not have a credit history, is that considered using the credit score and would that require including the FCRA disclosures on our adverse action notice – some fields would then be left blank? I’m thinking we would only send the Reg B adverse action notice without the FCRA section as it would not apply?
2) As it pertains to the Credit Score Disclosure Exception Notice, model form H-5 is used when no credit score is available. If we decline the loan right away upon pulling credit, would we send form H-5, along with our Reg B adverse action notice? (Also wondering if FCRA has such language that would become part of the AAN when there is no credit?)

Thank you.

1. No score, no credit score disclosure on the AAN.

2. 1022.74(b) Adverse action notice. A person is not required to provide a risk-based pricing notice to the consumer under §1022.72(a), (c), or (d) if the person provides an adverse action notice to the consumer under section 615(a) of the FCRA.