I'm trying to find the BOL Tool "Adverse Action Notice CHeat Sheet". I have a printed copy but need to locate this again on BOL. I have lloked in the tools section without success. Can someone help me?

Thanks,

Look here .

I just did a seach for "Adverse Action Notice Cheat Sheet."

I must say this is one of the most valuable tools out there. For some reason the REg. B and FCRA stuff always causes confusion and this helps make it simple for the business lines. This forum is great!!

THIS IS MOST DEFINITELY THE BEST TOOL OUT THERE...ANYONE GOT ONE FOR HMDA?????????????

I agree this is a great tool. I hope it will be updated for the new Reg B changes.
If you deny based on co-applicant's credit, you have to give SPECIFIC reasons to the applicant. You cannot simply say " denied due to co-applicant's credit."

I'm still new to compliance and I'm trying to work through the Reg B vs. FCRA AAN requirements. I think this cheat sheet will help. I have a few questions...

1. For a joint app,if the primary applicant is declined, this states that no notice is required to the co-applicant. Why? From everything I've read this morning, if one or both are declined based on credit, they BOTH should get an AAN.

2.If both applicants are turned down because of credit, I'm understanding that we can send one notice (with both names) to both applicants. Is this only applicable if the specific reasons for denial are the same? If the reasons are credit related, but are not exactly the same, do we have to send separate, more specific notices?

3. Once the revised Reg B kicks in, will "credit history of co-applicant" be a no-no on the primary applicant's AAN if the denial is based on the co-applicant's credit?

1. Reg. B only requires the lender to notify the primary applicant. Since there was no negative credit for the co-applicant, no FCRA notice is required.

2. If they live at the same address I would take the stance that one notice is sufficient; if they live at different addresses then I would send separate notices.

Second part of two and then question 3 – you must give the specific reasons for denial. “Credit history of co-applicant” will not be sufficient.

For these situations we intend (for now anyways) to put a legend on the AAN. A=Applicant C=Co-applicant and then we will put A or C or A & C beside the appropriate reasons.

Thank you for your response & help!!!

I think everyone reading this should be aware that the FACTA changes conflict with Reg. B regarding how and who to notify in AAN situations. Don't forget to keep an eye on the FACTA interpretations and how to handle coapplicant issues under the new rule. It is not clear at all yet and many banks don't see a way to comply with FACT and Reg. B at the same time regarding notifications. Just a heads up.

Anon, I have not spent a lot of time on the FACT Act yet. But in what little skimming I have done I have not picked up on this change you mention. Please give me a reference to the cite you are referring to.

Thanks.

Yes, we will send one notice if they live at the same address and separate notices to different addresses. This is not my procedure so sure go ahead and copy it , I got the idea from a suggestion by David Dickinson (I think) in one of his posts.

What makes this really frustrating is that if you step back and think about the whole "Decline" process, from a layman's point of view, there is no difference between Reg B denial and FCRA/FACTA notices.

Not really. Bottom line is I don't get the loan, and I want to know why. If I start receiving two separate notices, or one notice to me, another different set to my co-applicant, not only will I be confused, I will think the bank is run by idiots who don't know how to just tell someone "No."

This is why these regs get so frustrating. In our attempt to abide by the letter of each of these laws, we miss the spirit by a wide mile. The customer should be told they didn't get the loan, and why in one simple, concise form.

I think the preamble to the latest Reg B Commentary speaks to the simplist method:

Co-applicants have no expectation of privacy. Everyone gets to see the dirty laundry since they brought it in together.

Andy, thanks. Your interpretation is the same as mine, but the Anon post is the 2nd or 3rd time I've seen that statement and I thought maybe I had missed something.

Can you please tell me where Reg B states specific reasons for denial of a coapplicant should be give to a primary applicant rather than stating "unqualified coapplicant"?

202.9(a)(2)(i) and 202.9(b)(2).

Also from the pre-amble:

……the reasons for adverse action must be specific. For example, a general statement that “the guarantor did not meet the creditor’s standards of credit worthiness” is insufficient.

Sorry ti took so long to get back to this link. My sign in stillnot working, but although it is true Reg. B says you can give notice to the primary applicant and there is no expectation of privacy between applicants. But the FACTA which retained the adverse action language of the original FCRA indicates the applicant that the negative information realted to must receive the notice and each applicant must receive a notice. So if the co-applicant had bankruptcy and you decline then under FACTA you must send the AAN to the co-applicant with their specific reasons of decline and then a separate notice to the primary applicant saying "Co-applicant did not qualify" or something along those lines. The privacy aspect of the two regs is waht differs and is causing problems. As a result we will be adding language to all application forms that authorizes the Bank to share credit information with other applicants on the form. So int ehend both parties receive their own notice, but the content of the AAN will be the same for both, no longer any segregation of reasons for privacy concerns.

What section of FACTA are you referring to?

Quote:

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the AAN to the co-applicant with their specific reasons of decline and then a separate notice to the primary applicant saying "Co-applicant did not qualify" or something along those lines. The privacy aspect of the two regs is waht differs and is causing problems

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Can you point to where in the revised FCRA you are referring. I'm not aware of any specific privacy provision in the FCRA or in FACTA that would cause this to happen.

If you have multiple co-apps or guarantors, is anyone distinguishing by NAME on the notice which guarantor etc. has the credit issue or are you simply referring to something like "poor credit history--Guarantor."