Baton Rouge, La. — AppOne, a provider of Internet-based risk mitigation and financial technology to banks, auto finance companies and independent auto dealers, has announced the release of a new feature that generates “adverse action letters,” which are required by federal and state regulations including, the Fair Credit Reporting Act (FCRA).
AppOne’s new feature consists of an automated module that prompts dealers to construct and print the fully compliant adverse action notice based on loan application information previously submitted. Additionally, AppOne has also enhanced its online credit report retrieval system to prompt dealers to generate adverse action letters to consumers on whom credit reports were retrieved but were never approved by one or more lenders.
In many states, if an auto dealership enters into retail installment contracts with consumers, or even if it just arranges for them to obtain credit from a financing source, the dealership is required by law to inform these consumers of the declination of credit. The dealership must also furnish the reasons for the decision, identify the credit information source whenever the dealer’s adverse action is based upon the consumer’s credit report, and inform consumers they have a right to obtain a copy of the report. However, because this area of the law continues to develop in the courts and enforcement has traditionally been very lax, many independent dealers have not stayed current within this area of compliance. Now that regulators have begun aggressively enforcing these regulations, most dealers are in danger of legal action but are unsure of their legal responsibilities.
“Many independent auto dealers unknowingly have not complied with state and federal regulations regarding adverse action letters,” said Lee Domingue, CEO of AppOne. “Offering an integrated feature that seamlessly automates the production and delivery of these letters is another way in which our platform reduces potential legal risks by assuring that all credit checks are in full compliance with state and federal regulations.”
