Compliance Alliance Q&A 4-16-18


I am trying to research a few things for beneficial ownership. Our current new account process includes a pre-qualification piece for credit cards and lines of credit. This "soft hit" on credit is included in the customer verification process. Are we out of compliance for soft pulls on credit for beneficial owners who are not signers on an account?


Technically, beneficial owners are not owners/signers of the account.  In order to pull credit, you'd need permission (written) from the beneficial owner. FCRA outlines permissible purposes to pull credit reports. FCRA 604(a)(3)(A) "...intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer..."   

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