Privacy Laws if Individual Only Pledged Collateral

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Question:

If an individual uses their CD for collateral for someone else and is not a guarantor or co-signer, can we tell this person if the customer is delinquent or give any loan information on this loan? I was not sure how the privacy laws would work if they only pledged the collateral.

Answer:

See Privacy of Consumer Financial Information Section 1016.15.

(iv) To persons holding a legal or beneficial interest relating to the consumer; or

The person pledging the CD would have a beneficial interest.

First published on BankersOnline.com 12/10/12