Question: I have a question regarding the counteroffer/adverse action provisions of Reg. B. Does a change in the "terms" of credit only apply to rate, amount, loan term, or to other aspects of the transaction? For example, if we condition a mortgage loan approval on a new roof or other work requirements, does that constitute a counteroffer and would we have to provide an adverse action letter if the borrower doesn't want to perform the work and declines the loan offer?
Answer: Reg. B defines terms as (§202.2 Definitions. Paragraph 2(c)(2)(v)) "interest rate, length of maturity, collateral, or amount of downpayment".
You could classify your scenario as a counteroffer based on the collateral, because it is not acceptable in its current state of repair.
BankersOnline is a free service made possible by the generous support of our
advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all
banking professionals. Support our advertisers and sponsors by clicking
through to learn more about their products and services.