Answer:
The bank would have no liability if a dealer was pulling credit reports on consumers without a permissible purpose. This would be a civil matter between the consumer and the dealer.
Your dealer agreement should address what is acceptable from a CIP and customer due diligence standpoint when conflicting information or alerts are contained in the credit file documentation.
As far as liability if the loan is actually made to a fictitious person? The loan will only be as good as your recourse agreement with the dealer.
First published on BankersOnline.com 1/16/06
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