CU Inquiries - Legit as Hard Inquiry or Not

[Anonymous]

Haven't been able to find a definitive answer. When I reopened my CU accounts, both used a hard inquiry to pull my EQ reports. I also noticed I have a hard inquiry from USBank when I opened my account with them. Is opening a bank account the same as requesting credit, thus giving them the permission to perform a hard inquiry?  Are hard inquiries from CU's/Banks disputable if used just to open new accounts only versus applying for CC's, heloc's, etc...?

[fused]

If this was for a checking account with OD protection, then yes! Checking w/o OD protection or savings account, NO!

[fused]

You can be sure this will stir a debate, heck even the mods don't agree on this topic.

[Junejer]

I don't think that they should have PP to open a checking or savings w/o ODP, but they do. I was in banking for a number of years, and we never used to pull credit for depository accounts, even with ODP.

Then, in the late '90s, they gave us the option to pull or not. Then, that option went away on new customer accounts. Then on new checking and then savings... It is getting really ridiculous.

I have other threads on this topic, where I go into much greater detail. I am tired tonight though, so...

[Anonymous]

When I opened my CU checking account - I asked and she said it would be soft- WRONG

This process has been built into the system opening the account-

It is right ? No

It's just like the car dealership insisting on running your credit when paying cash- 

You can go somewhere else-

BUT- You need to decide if the INQ is worth opening the account-

as it seems a Hard is SOP for opening an account these days-

[Anonymous]

Had the same problem - was advised would be a soft inquiry.  Can these types of inquiries be disputed, or are they valid?

[Junejer]

Haze, as Fused said, there is a lot of debate about this on the forums. I think that they are PP, but I think that it sucks that they do it. Others think they don't have PP and would advise you to dispute them. Wait and see what others think.

[Anonymous]

My 2 theories ... FWIW ...

1.  They have PP to check a consumer report  if they have a "legitimate business need for the information in connection with a business transaction that is initiated by the consumer." See FCRA Section 604(a)(3)(F)(i).

This is about as broad a license to pull your CR as it could possibly be.  It may make more sense for them to pull ChexSystems -- which also provides "consumer reports" -- to see if you are a habitual check bouncer, but it looks like the CRs are fair game for the banks and CUs when you open an account.

2.  This issue has more to do with the anti-terrorism hysteria than with credit.  Seriously.  After 9/11, the Patriot Act requires financial institutions (including CUs) to check the ID of their customers to make sure they are not on the Black List of suspected terrorists or money launderers.  Perhaps some financial institutions believe pulling a CR helps them verify ID.  Just my conspiracy theory.

[Anonymous]

Definitely valid points. I do recall both CU's had info posted regarding checking your history is due to anti-terrorism prevention. However, I THOUGHT it was only via chex systems. Even when I called one of the CU's, the rep was adament it was a soft pull.  There is much confusion regarding this issue. I think I may dispute based on their interpretation as well.

[Junejer]

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@Anonymous wrote:

My 2 theories ... FWIW ...

1. They have PP to check a consumer report if they have a "legitimate business need for the information in connection with a business transaction that is initiated by the consumer." See FCRA Section 604(a)(3)(F)(i).

This is about as broad a license to pull your CR as it could possibly be. It may make more sense for them to pull ChexSystems -- which also provides "consumer reports" -- to see if you are a habitual check bouncer, but it looks like the CRs are fair game for the banks and CUs when you open an account.

2. This issue has more to do with the anti-terrorism hysteria than with credit. Seriously. After 9/11, the Patriot Act requires financial institutions (including CUs) to check the ID of their customers to make sure they are not on the Black List of suspected terrorists or money launderers. Perhaps some financial institutions believe pulling a CR helps them verify ID. Just my conspiracy theory.

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Mas, first they still do pull ChexSystems in addition to pulling the CR. That's a built-in function of the software as well. While they are required to check ID per the Patriot Act, the credit pulling is just to give them warm fuzzies. 9/11 and the Patriot Act was a nice excuse for going widespread with what they wanted to do anyway. It's really belt and suspenders.