Does an entity that is related by common ownership with a servicing entity have a permissible purpose to pull credit on an existing customer of the servicing entity in order to perform a modification of the account?

Can I assume that the pulling of credit by the non-servicing(non-originating) entity to perform the modification would qualify under 1681(b) as intending to use the information in connection with a credti transaction involving the consumer on whome the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer?

Any feedback is much appreciated. Received a complaint from a borrower today stating no permissible purpose.

Was the modification requested by the consumer or was the customer past due, etc??? Otherwise, I - think the consumer is right if this a closed-end loan. IMHO - If the loan was performing as agreed, pulling a credit report to figure out whether to offer something to the customer (even a modification) would be marketing. Under what permissible purpose would a non- servicing, non-originating party operate. That would be like me pulling a report on you because you have a loan with Citibank.

Sorry about that, forgot to mention, yes the borrower was past due and in fact did request a mod.

I think a couple of more questions still might need to be answered. They requested a modification from whom? How specifically is the affiliate involved in this transaction? What type of loan is this? What type of modification is being contemplated? Was the customer informed that the affiliate was going to be involved in the transaction?

This is where it gets hairy and I can see where you are going and completely agree. The call was transferred to from one affiliate to the other b/c the borrower specifically requested a mod of the loan terms. I am of the understanding that when the call was transferred the affiliated entity explained the relationship and after receiving verbal authorization from the borrower, requested specific information from the borrower regarding moving forward with the mod. U

Unfortunately, it may be more of a he said/she said at this point.