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If memory serves, the old prohibition that kept banks from showing customers (or giving them a copy) of their credit report was in the contract between the Credit Reporting Agencies (CRAs) and the bank. Back then, the CRAs charged a tidy sum to provide customers with a copy of their credit report, and while this may not have been the only factor, I’m sure it played a roll in the contractual prohibition.

Essentially, this global prohibition no longer exists. Even if there is wording in the contract referencing the prohibition, it is generally deemed to be unenforceable. The regulators began chipping away at it in the 90’s. Initially, if a customer was denied a request for credit, the banks got the OK to discuss with the customer the specific pieces of credit information that led to the denial. Then, with the major changes to the FCRA that became effective September 30, 1997, the regulation clearly stated that it was NOT a violation of the FCRA for a bank to provide a customer with a copy of their credit report if adverse action was taken and was based on the contents of the report.

As a result of this, the CRAs either removed the prohibition clause from their contracts altogether or quit any type of enforcement of the clause. At that time I was working at a bank and our policy was to encourage the customer to request it directly from the CRAs so they would receive it in a consumer friendly format. Also, when a consumer was denied credit or a bank service based on information in their credit report, the customer could contact the CRA within 60 days of the denial by calling the toll free number provided by the bank on the Notice of Adverse Action and obtain a free report based on the denial action.

My experience is that this request is more likely to come from a denial of credit rather than a loan that is booked, but not always. Additionally, consumers are now entitled to one free credit bureau report a year. Since there are three major CRAs, it is recommended that consumers obtain a report from one of the “big three” agencies every four months. By the time they are back to the first agency, a year has passed and they are due another free report.

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I do not agree. No bank is allowed to give a copy of the credit report to the consumer but they can show it to them. There is some issue that by giving it you may become a consumer credit reporting agency yourself. Definitely do not give a copy to any consumer. Of course you have to give the two page credit score part mandated by regulation. That is different.

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I looked back over my comments and still believe I gave an accurate response. Section 607(c) of FCRA (pre-dating FACTA) states:

"Disclosure of consumer reports by users allowed. A consumer reporting agency may not prohibit a user of a consumer report furnished by the agency on a consumer from disclosing the contents of the report to the consumer, if adverse action against the consumer has been taken by the user based in whole or in part on the report."

Now, we can split hairs over what is meant by “disclosure” but that pretty much kills the argument providing the information when credit is denied. I also believe that when credit is approved, the contract between the CRA and the bank would rule. I can’t imagine that XYZ Credit Company produces a “consumer copy” that you are not allowed to provide to the “consumer.” BUT, if you want to be sure, you should review your contract with XYZ Credit Company.

I still believe that the best approach, when NOT dealing with a credit denial situation, is to refer the customer(s) to www.annualcreditreport.com . As I explained in my last paragraph below, I do not believe you are specifically PROHIBITED from providing the consumer a copy in a non-denial situation, BUT I feel everyone would be better served if you educate the consumer on how they can stagger their requests for their free report so that they can review their credit information every four months.

Just for your reading pleasure, I have pasted some links from BOL Threads below where this very issue is discussed. As you can probably imagine, there are varying opinions on what would cause a bank to be considered a CRA:

*** Providing a copy of a consumer’s credit report to the consumer?
*** To an affiliate?
*** Occasionally?
*** On a regular basis?

There are also a few commenters that had privacy concerns on providing/sharing joint credit reports. Reg B/ECOA provides some relief on the privacy issue when applicants apply jointly, but many banks are not comfortable getting too close to that line.

Hope this information helps you make your decision. You are not alone out there…I know that makes you feel better! I am also providing a copy of this email to your advisor as well at your request.

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You can do what you want but I just talked to (FDIC employee) who will be in the bank in two weeks and he does not expect to see the bank give a copy of the credit report to applicants for a loan. He has always understood that was against the contract, but I pointed out it is allowed only when adverse action is taken and even then the regulation does not clarify how the information can be given and if given there may be serious identity theft issues for potential liability to the bank.

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I think we are pretty much on the same page here. I was hard pressed to find anything legal or regulatory that specifically prohibited giving the customer a copy in a non-denial situation. Certainly not since the FCRA revisions of 1997 and the newer FACTA regulations (which of course fall under the FCRA).

BUT, I think we are both in agreement that taking a “best practices” approach and pro-actively educating the consumer about the new, cost-free access they now have to their credit information is the better solution all around. This effectively takes the bank “out of the middle” and eliminates any potential issues that might arise.

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FYI - As you referenced you had difficulty finding anything legal prohibiting giving the customer a copy of the report, I pulled the credit reporting agency agreements in a bank this week. XYZ Credit Company specifically says 1. Credit Licensed software. "1.3 Client shall not reproduce, modify, sublease or distribute the Credit Information or reports obtained as a result of this Addendum....." They had another contract with Credit Bureau of Small Town USA which says Item "7 Subscriber Use Limitations: Subscriber hereby certifies and agrees that it will request and use credit information received from Biggie CRA and Credit Bureau of Small Town USA solely in connection with transaction involving the consumer as to whom such information is sought, or for employment purposes, and will not request or use such information for purposes prohibited by law. All such information shall be maintained by subscriber in strict confidence and disclosed only to employees whose duties reasonably relate to the legitimate business purposes for which the information is requested and will not sell or otherwise distribute to third parties and information received hereunder, except as otherwise required by law."

This bears out what the FDIC Examiners told me which was the contract itself prohibits the bank from giving the applicant a copy of the credit report. I underlined that part of both contracts I just reviewed.

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It appears to me that the prohibitions the advisor described above primarily relate to distribution of the Credit Report to third parties and not necessarily to the customer requesting the loan or applying for employment. In additional to the requirement that CRAs NOT prohibit disclosing the Credit Report information to customer to whom credit is denied, I am pretty sure that PRIOR TO denying employment to a consumer you must provide them with both a copy of the Credit Report as well as a description in writing of the rights of the consumer under this title, as prescribed by the Federal Trade Commission under section 609(c)(3). I found this reference under 604(b)(3)(A). I have also read some posts in the BOL threads where certain state laws actually REQUIRE that banks furnish customers with a copy of their Credit Report if the cost of the report was passed on to the customer. Any opinions, advice, recommendations or chocolate will be appreciated!

Thanks so much!

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It irks me that the "advisor" - who clearly has some knowledge and reading gaps - spoke with an FDIC examiner who will be in the bank shortly, meaning they revealed who the bank is, etc. setting the bank up for some wasted tme. Not too cool.

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