No, we do not believe that you need to provide an adverse action notice when denying a business’s request for a checking account. The Fair Credit Reporting Act (FCRA)’s requirement to provide adverse action notices applies only to persons taking adverse action against consumers. Consequently, we believe you may refuse to open the checking account without providing reasons or documentation.

Note that adverse action notices must be provided under the Equal Credit Opportunity Act (ECOA) when a creditor takes adverse action against a credit applicant, regardless of whether the applicant is a consumer or a business. However, this requirement would not apply to a request for a business checking account lacking any credit features.

For resources related to our guidance, please see:

• FCRA, 15 USC 1681m(a) (“If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall— (1) provide oral, written, or electronic notice of the adverse action to the consumer.”)

• FCRA, 15 USC 1681a(k)(1)(B)(iv) (“The term ‘adverse action’ . . . means . . . an action taken or determination that is (I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer . . . ; and (II) adverse to the interests of the consumer.”)

• FCRA, 15 USC 1681a(c) (“The term ‘consumer’ means an individual.”)

• FRB Philadelphia, Consumer Compliance Outlook: Adverse Action Notice Requirements Under the ECOA and the FCRA (2Q 2013) (“[T]he FCRA only applies to consumer transactions, so adverse action notices are not required under the FCRA for business transactions.”)

• ECOA, 15 USC 1691(d)(2) (“Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor.”)

• ECOA , 15 USC 1691a(b) (“The term ‘applicant’ means any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.”)

• ECOA, 15 USC 1691a(f) (“The term ‘person’ means a natural person, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.”)