Q: Is a bank responsible to the consumer when it obtains information from someone other than a consumer reporting agency?
A: Yes. Disclosures must be made when credit for personal, family, or household purposes is denied or the charge is increased even partly because of information obtained from someone other than a consumer reporting agency bearing on the consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. Disclosure would not be required if the denial is based on the bank’s own experience with the consumer, on his/her credit application, or on the bank’s credit policies. Required disclosures must be made regardless of whether the information is fresh or in the files. At the time credit is denied or the charge increased, the bank must inform the consumer orally or in writing of his/her right to make a written request for disclosure of the nature of the information. If the consumer requests this information within 60 days, the bank must tell him/her the nature of the information orally or in writing. Note that these requirements apply to credit and not to insurance or employment when disclosures are required and a report from a consumer reporting agency is involved (16 CFR 615(b) – see question 4).