FTC Letter Is Not Binding.(Federal Trade Commission comments on credit checks; use of online banking expected to skyrocket)(Brief Article)

In late July, the Federal Trade Commission issued a nonbinding letter suggesting that banks get written permission to do credit cheeks on business owners who personally guarantee or apply for a commercial loan. This nonbinding staff interpretation of the Fair Credit Reporting Act represents a change from how banks have always handled commercial loan applications. And it has drawn criticism from bankers who say it creates an unnecessary burden and changes existing underwriting procedures.

Although the FTC letter is not legally binding, it has caused concern, since it is the FTC's first interpretation of the 1970 Fair Credit Reporting Act. Passage of the …