QUESTION
Last year we had a prescreened credit campaign. Earlier this year, we
had a banking examination and were scored down because we did not have all the
record retention requirements for prescreened credit solicitations. In the case
of the prescreened credit, what are the record retention requirements?
ANSWER
For specific information about prescreened solicitations, please
consult the Fair Credit Reporting Act.
Under the Equal Credit Opportunity Act, for a period of twenty-five
months after the date on which an offer of credit is made to potential
customers in connection with a prescreened credit solicitation, the creditor
must retain:
- The text of any prescreened solicitation;
- The list of criteria the creditor used to select potential recipients of the solicitation; and
- Any formal or informal correspondence related to complaints about the solicitation. [12 CFR § 202.12(b)(7); 12 CFR Supplement I to Part 202 – Official Staff Interpretations § 202.12(b)(7)-1]
In order to satisfy the requirement to retain the criteria used to
select potential recipients, a creditor must retain the criteria used to determine
the potential recipients of the particular solicitation, and the criteria to
determine who actually will be offered credit. [12 CFR Supplement I to Part 202
– Official Staff Interpretations § 202.12(b)(7)-2]
With respect to the requirement to retain correspondence, a creditor
may retain correspondence relating to complaints of consumers about prescreened
solicitations in any manner that is reasonably accessible and is understandable
to examiners. There is no requirement to establish a separate database or set
of files for such correspondence, or to match consumer complaints with specific
solicitation programs. [12 CFR Supplement I to Part 202 – Official Staff
Interpretations § 202.12(b)(7)-3]
Jonathan Foxx
President & Managing Director
Lenders Compliance Group
