ABC Bank's Responsibility
Question
ABC Bank has an interactive Internet Web site at which it takes consumer credit applications. At the time an applicant completes an application on the Web site and submits it, the applicant also is asked for his or her email address. If the application is denied, ABC sends an adverse action notice to the applicant's email address listed on the application. Using this procedure, what is ABC Bank's responsibility?
Answers
Explanations
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A. B. C. D.D
ABC Bank's responsibility in this scenario is to comply with the adverse action notice requirements under the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). These laws require that certain disclosures be made to consumers in the event that they are denied credit or receive unfavorable credit terms based on their credit report or other information.
In this case, since ABC Bank is obtaining the applicant's email address at the time of application and sending the adverse action notice via email, they must comply with the electronic disclosure requirements under the ECOA and FCRA. Under these requirements, ABC Bank must ensure that the applicant has affirmatively consented to receiving electronic disclosures before sending the adverse action notice via email.
Therefore, the correct answer is D: Obtain the applicant's affirmative consent before sending the notice. This means that ABC Bank must have a process in place to obtain the applicant's affirmative consent to receive electronic disclosures, which could include displaying a clear and conspicuous notice on the application form that informs the applicant of their right to receive the adverse action notice electronically and asks them to provide their consent.
It is not necessary for ABC Bank to post the notice on its Web site also (answer A) or send a paper notice by regular mail also (answer B), although they may choose to do so as an additional courtesy to the applicant.
Using a credit scoring system (answer C) is not directly relevant to the question of ABC Bank's responsibility to provide adverse action notices, although it is likely that ABC Bank uses some form of credit scoring or underwriting system to evaluate credit applications.
