My bank is seeking clarification regarding Fair Credit Reporting Act adverse action notice requirements when its closes consumer deposit accounts.

Currently, the bank provides an FCRA adverse action notice to individuals when the bank denies a deposit account application due to derogatory information in a ChexSystems report. However, if, within 90 days of opening the account, it receives derogatory information from ChexSystems, the bank closes the account without providing an adverse action notice. The bank’s internal auditors think it should be providing one.

The bank’s auditors are correct. Section 615(a) of the FCRA makes it clear that anytime an adverse decision is based in whole or in part on a consumer report, a FCRA adverse action notice is required. This includes a decision to close an account based on information that ChexSystems provided after account opening. (February 2021)