Yes, we believe the requirement to provide customers with notice and an opportunity to opt-out under the FCRA to avoid being considered a consumer reporting agency would apply if you share credit-related information with a subsidiary that is 100% owned by your bank.

The FCRA provides that a financial institution will not be considered a “consumer reporting agency” if it shares credit-related information “among persons related by common ownership or affiliated by corporate control,” and provides proper notice and an opportunity to opt-out. Consequently, you must provide the notice and opportunity to opt-out when sharing credit information with any company under common ownership (or common corporate control) to avoid being categorized as a consumer reporting agency.

For purposes of the affiliate marketing notice and opt out requirements, Regulation V defines “common ownership or common corporate control” as a relationship in which one company has “(i) Ownership, control, or power to vote 25 percent or more of the outstanding shares of any class of voting security of a company . . . (ii) Control in any manner over the election of a majority of the directors, trustees, or general partners . . . of a company; or . . . (iii) The power to exercise, directly or indirectly, a controlling influence over the management or policies of a company. . . .” Because your bank owns more than 25% of the subsidiary’s shares (and in fact owns 100% of its shares), we believe the subsidiary would be considered an affiliate of your bank.

For resources related to our guidance, please see:

• FCRA, 15 USC 1681a(f) (“The term ‘consumer reporting agency’ 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.”)

• FCRA, 15 USC 1681a(d)(2) (“Except as provided in paragraph (3), the term ‘consumer report’ does not include — (A) subject to section 1681s–3 of this title, any (i) report containing information solely as to transactions or experiences between the consumer and the person making the report; (ii) communication of that information among persons related by common ownership or affiliated by corporate control; or (iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons; . . .”)

• Regulation V, 12 CFR 1022.3(b) (“Affiliate means any company that is related by common ownership or common corporate control with another company. For example, an affiliate of a Federal credit union is a credit union service corporation, as provided in 12 CFR part 712, that is controlled by the Federal credit union.”)

• Regulation V, 12 CFR 1022.3(d) (“Common ownership or common corporate control means a relationship between two companies under which:

(1) One company has, with respect to the other company:

    (i) Ownership, control, or power to vote 25 percent or more of the outstanding
    shares of any class of voting security of a company, directly or indirectly, or
    acting through one or more other persons;

    (ii) Control in any manner over the election of a majority of the directors,
    trustees, or general partners (or individuals exercising similar functions)
    of a company; or

    (iii) The power to exercise, directly or indirectly, a controlling influence over
    the management or policies of a company, as determined by the applicable
    prudential regulator (as defined in 12 U.S.C. 5481(24)) (a credit union is
    presumed to have a controlling influence over the management or policies
    of a credit union service corporation if the credit union service corporation
    is 67% owned by credit unions) or, where there is no prudential regulator,
    by the Bureau; or

(2) Any other person has, with respect to both companies, a relationship described in paragraphs (d)(1)(i) through (d)(1)(ii).”)