Financial institutions increasingly are turning to social media websites like Facebook, Twitter, and Match.com to create credit profiles of potential borrowers alongside official credit reports.
Lenders, in general, are cautious of denying loan applications based on what they discover on social media websites because they run the risk of violating the Equal Credit Opportunity Act, which requires lenders to tell borrowers why they have been denied credit. “The rule requires lenders disclose the top four primary reasons the loan was not approved. If social media is in there, it would be listed,” says Nessa Feddis, senior vice president and deputy chief counsel for consumer protection and payments at the American Bankers Association. Feddis says banks are required to monitor social media for complaints about the institution itself.