Adverse Action Notice Verbiage
Answered by BOL Gurus Mary Beth Guard and Jack Holzknecht Bios
Question: Can we use a reason such as 'unable to verify identity' on an adverse action notice? Is that allowable under Reg. B?
Answer: Under Reg B, you do have to give a specific reason for the denial,
but perhaps a better way to proceed would be to notify the applicant that you
deem the application to be incomplete because they have failed to provide
information that would allow you to verify identity. Spell out what they would need to
provide. If they can't do it within the requisite timeframe, you consider the
application incomplete. That way, if the reason you can't verify identity is because the
person applying is an imposter, you aren't paving the way for him/her to
obtain a copy of the victim's credit report.
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