Fair Credit Reporting Act Permissible Purpose Policy
FAIR CREDIT REPORTING ACT PERMISSIBLE PURPOSE POLICY
OVERVIEW
Fair Credit Reporting Act Permissible Purpose Policy Overview The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection, dissemination, and use of consumer information, including consumer credit information. 15 U.S. Code §1681b of the FCRA states that any consumer reporting agency may furnish a consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an order, a subpoena issued in connection with proceedings before a Federal grand jury, or a subpoena issued in accordance with section 5318 of title 31 or section 3486 of title 18.
(2) In accordance with the written instructions of the consumer to whom it relates.
(3) To a person which it has reason to believe:
(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; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status; or
(E) intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the information—
(i) in connection with a business transaction that is initiated by the consumer; or
(ii) to review an account to determine whether the consumer continues to meet the terms of the account.
(G) executive departments and agencies in connection with the issuance of government-sponsored individually billed travel charge cards.
As defined in section §1681a of the FCRA –
Consumer means an individual.
Consumer reporting agency (CRA) means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.
A Consumer report means any written, oral, or other communication by CRAs bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s
credit or insurance to be used primarily for personal, family, or household purposes; employment purposes; or
any other purpose authorized under section 1681b of this title (see above section for additional authorized purposes).
Person means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.
PURPOSE
This Policy has been created to document the circumstance in which Kredit Financial Inc. (Kredit) obtains copies of consumer credit reports.
POLICY
It is the policy of Kredit to obtain a copy of a consumer’s credit report only upon receipt of their authorization and request to do so.
SCOPE
This Policy applies to all instances when a consumer requests a copy of their credit report through the Kredit platform.
ROLES AND RESPONSIBILIES
Kredit’s Chief Compliance Officer (CCO) is responsible for ensuring this Policy reflects the most current process utilized to obtain consumer credit reports, that the process complies with the requirements of the FCRA, and for developing control(s) that ensure the requirements are being followed. The CCO is also responsible for reviewing this Policy on an annual basis.
Kredit’s Chief Executive Officer (CEO) is responsible for notifying the CCO of any changes related to the Procedures set forth in this Policy.
Kredit’s Chief Technology Officer (CTO) is responsible for ensuring the identified control(s) are implemented on the Kredit platform.
PROCEDURES
Kredit provides consumers with the opportunity to view a copy of their credit report while on the platform, so they may see a holistic view of all their respective accounts that are in collections. Prior to obtaining the consumer’s credit report, and in order for the consumer to view their credit report, consumers must both verify their identity and provide Kredit with authorization to obtain a copy of the report.
Consumer Authorization: Consumers provide authorization to obtain a copy of their credit report by checking a box on the Kredit platform that contains the following language, “By checking this box, you authorize Kredit Financial Inc. to obtain your credit report from one or more credit reporting agencies on your behalf. Your report will not be displayed to anyone other than yourself, however, Kredit may retain a copy of your report for the period of time necessary to comply with legal requirements.”
Consumer ID Verification: Consumers must provide their name, address, cell phone number, email address, last four of their SSN, and date of birth as a means of verifying their identity.
Upon completion of both of these steps, Kredit obtains a copy of the consumer’s credit report through its outside service provider, Bloom Credit, and presents the report to the consumer.
Kredit retains a copy of the consumer’s credit report for the period of time required to comply with legal requirements.
COMMUNICATION
This Policy shall be communicated to all affected employees via email and maintained in the Policies folder, sub-folder Regulatory Policies, on Google Drive for reference purposes.
CONTROL
On an annual basis and beginning one year from the creation of this Policy, Kredit’s CCO shall perform an audit of the above stated procedures to ensure they are being followed.
VIOLATIONS
Failure to follow the above stated procedures may result in the release of a consumer’s credit report to an unintended third party and a potential violation of the FCRA.
CHANGE SUMMARY
Purpose: Internal Policy
Category: Regulatory
Policy Name: Fair Credit Reporting Act Permissible Purpose Policy
| Event | Event Date | Event By | Date Reviewed | Reviewed By | Version |
|---|---|---|---|---|---|
Creation | 09//092022 | Colene McNinch, CCO | 09/15/2022 | Dave Hanrahan, CEO | 1.0 |
Communication | 09/16/2022 | Colene McNinch, CCO | |||
Annual review – updated consumer ID components | 10/06/2023 | Colene McNinch, CCO | 1.1 |
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