What is an acceptable time frame to re-use a credit report for consumer non-real estate, consumer real-estate (ATR), and commercial loans? Example: Is it acceptable to reuse a credit report that was pulled 45-90 days prior (manually re-verified the current MLA and OFAC status) for a new consumer car loan, or a new consumer real-estate loan, or a new commercial loan?
I’m not sure there is an industry standard. Although reuse of credit reports has been a common practice for banks there may be some potential risks you want to consider with the requirements we have now. This was discussed at the ABA RCC this summer… although some in the audience preferred to use old reports, the consensus seemed to be that the best method is to pull new reports. I think it’s your best compliance practice and makes the process less confusing for your lending staff on when to pull/when not to pull and what needs to be considered.
Things to consider:
1) Your contract with the credit bureau to see if it allow reuse/prohibits reuse.
2) With rules related to a consumer’s ability to repay I think it could be argued that relying potentially out of date credit report information is not making “a reasonable and good faith determination.” Even if ATR rule may not apply to a transaction, I would consider the safety and soundness aspect of determining any borrower’s ability to repay. In addition to that you’d want to consider FACTA Red Flags – what’s your policy on using CRs to identify fraud alerts. Maybe you have a credit report on file, but someone has comes into another location to make a loan (and it isn’t your customer)… if your customer has put a fraud/active duty alert, security freeze etc. on their account with the bureaus and you don’t pull the report you won’t see that information.
3) the MLA. If you use the credit report safe harbor for identifying covered borrowers you need current information.
I’m sure there are other things that could be affected, but this would be enough for me to want a new report.