We haven't had a hit, however, realized we do not have a procedure in place on the loan side if a potential borrower is actually on the OFAC list. What would you tell the applicant? Adverse action notice with "Other" reason: "You're on the OFAC list"?

there's a phrase I've seen Ken use in answers on similar threads. It's something like "Does not meet the bank's credit standards". Nice and bland, descriptive without being exact.

Thanks for the info! This would not present a problem with Reg B since we are to provide specific reasons for denial?

Someone more expert than me on loan regs would have to speak to that. I think there would have to be a balance between the requirement to provide specfic reasons for denial with the expectation that you not 'tip off' the SDN.

(A little silly, I'll grant, since the list is publicly available. In the organizations I've worked, we try to not tell people they're on a government sanction list if we can avoid it. So, I'm only speaking from my own experience.)

Thanks, David, do you have another suggestion for providing the reason? I agree it would be better to have the Reg B violation and it is very unlikely this scenario would happen, just seeing what other banks' procedures might be.