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Disclosures Needed When Offering OD LOCs

Answered by: 
Randy Carey
Dan Persfull

Question: 
We want to start offering OD LOCs to our customers on automatic approval based on the customers QualiFile score with ChexSystems. We do not want the customers to have to apply for this, but rather, offer them the product after we have run them through ChexSystems and determined that they are qualified. What type of disclosures do we need for this? Do we need to have wording on the checking account application stating that we will use the ChexSystems report for this? Do you have any examples that you can give me?
Answer: 

Answer by Dan Persfull: You have to follow all the pre-screening rules found in the FCRA since ChexSystems is CRA by definition.

Answer: 

Answer by Randy Carey: I would take it one step further - you have no permissible purpose to use a credit report for the approval of a deposit account and then use it to market additional products.

First published on BankersOnline.com 8/1/11

First published on 08/01/2011

Filed under: 
Compliance
Filed under compliance as: 
CRA
Credit Report
Disclosures
IT

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