True or False: A credit union must provide an adverse action notice if it refuses to open an account based on a consumer report.

A credit union is required to provide an adverse action notice if it decides not to open an account due to information found in a consumer report. This requirement is in line with the Fair Credit Reporting Act (FCRA), which mandates that when a financial institution takes an adverse action based on a consumer report, it must inform the individual about that action. The notice serves to ensure transparency and gives the affected individual the opportunity to understand the decision made about their account, as well as the reasons behind it.

Issuing an adverse action notice not only fulfills a legal obligation but also maintains trust and goodwill between the institution and its clients. It allows individuals to be aware of and respond to potentially negative information in their consumer reports. This requirement applies universally and is not contingent upon specific account features like minimum balances or account types.