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Do Fair Credit Reporting Act adverse action notices related to deposit products need to include a “confidence” score?

I am seeking guidance as to whether Fair Credit Reporting Act (FCRA) adverse action notices related to deposit products must include a “confidence” score. My bank is contemplating implementing a new process for screening applicants for deposit accounts, which will utilize a collection of screening systems including Warning Systems (EWS). EWS will produce a “confidence” score based on data that includes deposit account records related to losses, charge offs, account abuse, collections, merchant data, dispute records, payment status (settled, unpaid, sold, discharged in bankruptcy). If the applicant fails this screen, the system alerts the bank to provide an adverse action notice. Under §615(a)(2) of FCRA adverse action notices must include any credit score used and other related information. However, the vendor’s sample adverse action does not contain the score information. The vendor says that the score information is not required. Can you confirm?

The question is whether the score generated is a “credit score” as defined by FCRA. Section 609(f)(2)(a) of FCRA defines credit score as a “numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors…” (Emphasis added.)(§609(f)(2)(a))

The question is not the purpose for which a particular bank is using the score (in this case, deposit account opening), but whether others use it to make credit decisions. If others use the score for credit decisions, it must be included in the adverse action notice even if when it is being used for non-credit decisions.

Based on your description, it appears that the score is not used for credit decisions, and so is not a credit score that must be disclosed in the adverse action notice. The bank should verify with the vendor, and, if it is used for credit decisions, include it in the notice. (July 2020)

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