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We are purchasing a portion of a pool of consumer mortgages and wanted to do a soft credit pull for the borrowers on the underlying loans. Do we have a permissible purpose to pull the reports under the FCRA, even though we have not obtained the consumer’s consent? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

We are purchasing a portion of a pool of consumer mortgages and wanted to do a soft credit pull for the borrowers on the underlying loans. Do we have a permissible purpose to pull the reports under the FCRA, even though we have not obtained the consumer’s consent?

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Yes, we believe that your institution has a permissible purpose for pulling the credit report. A permissible purpose exists when your institution “intends to use the information, as a potential investor or servicer . . . in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation.” 15 USC 1681b(a)(3)(E). This type of permissible purpose does not necessitate the consumer’s consent.