Q: Under 32 CFR 232.5(b), is an assignee permitted to avail itself of a covered borrower identification safe harbor if the assignee has maintained the original creditor’s record of a covered borrower check?
A: Yes. Under § 232.5(b) a creditor may conclusively determine whether credit is offered or extended to a covered borrower by assessing the status of a credit applicant, in accordance with the methods for checking the status of consumers discussed in § 232.5(b)(2). A creditor’s timely covered borrower check is legally conclusive, so long as the creditor creates and thereafter maintains a record of the consumer’s covered borrower status. Under § 232.3(i)(2) a creditor, by definition, includes the creditor’s assignee. Thus, the Department’s policy is to extend the covered borrower check safe harbor to a creditor’s assignee, provided that the assignee continues to maintain the record created by the creditor that initially extended the credit.