What does Facebook tell your banker?

September 26, 2011
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In her latest Small Biz Finance column for IBJ, Cambridge Capital Management’s Jean Wojtowicz writes about the criteria lenders are using to make loan decisions in this difficult economy.

Turn out that in addition to the expected factors like a borrower’s credit history and business plan, they’re increasingly weighing intangibles such as moral character.

Because most bankers don’t know their customers as well as they might have before mega-mergers changed the financial landscape, Wojtowicz said they’re looking for whatever information they can find before making loans.

So it’s entirely possible—if not probable—that lenders will search Google and Facebook for insight on potential borrowers.

That was a new one to me. I’ve heard of prospective employers checking out social media during the hiring process, but bankers?

I’m not sure how much my cat pictures and traffic rants reveal about the likelihood that I’ll repay a loan, but I don’t post anything online that I wouldn’t want my mother to see anyway. Not everyone is as discerning.

And as Wojtowicz points out, you only get one chance to make a first impression—even if it’s on the Internet.

What’s your take on the issue? Should character count in loan decisions? And is anything bankers find online fair game?

Join the conversation.

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  • absolutely
    As a former banker (commercial lender/credit analyst), I say that this information is absolutely 'in bounds'. Character is, after all, one of the 5 c's.

    The purpose of the underwriting process is to mitigate risks. On an ever increasing basis, I keep reading about courts that find against businesses for failing to do such simple due diligence as a google search.

    Personally, I've found undisclosed tax liens ($100K or more), undisclosed law suits (repossession) and other items. How about when a husband and wife apply for new credit together, but then are talking separation/divorce online.

    On one website (googling my own name for kicks) I found an employee of mine bragging about stealing office supplies. As a lender, would I want to loan to this person?

    As I said, it's about risk management, bankers could care less about your personal life. The question is not should they be looking for the information, but what should they do with it once they have it.

    A failure to look is in a large part a failure of the bank.

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