An Adverse Action Notice is in connection to a creditors response to a request from a borrower for credit. For example, a borrower request a higher card credit limit and the creditor denies the request, an Adverse Action Notice is required. If it was required in the for adjustments made to cardholder accounts, don't you think the Credit Card Companies would have done so rather than risk a considerable violation and substantial costs & CMP?
When a Creditor, as under the new CCARDA unilaterally decides to review all its borrower credit card accounts for those that do not represent a reasonable assumption of ability to repay the credit advanced on the card account, i.e. deterioration of credit worthiness, the creditor can predefine a class of cardholders that do not present a good risk profile and therefore are not likely to repay the debt in a timely and prudent manner, it is mining data for specific characteristics such as those outlined previously.
The new CCARDA rules do not conflict with Reg. B, the credit cards are already on the creditors books and under CCARDA, the creditor is not required to give Notice to the card holders of an identified "class" of cardholders from within its universe of cardholder data that they individually pose a poor risk to the creditor. However I believe they should send their borrowers' a letter at some point explaining their action with regard to action it's taken on the borrower's credit status as part of the class or group. Again as noted in the previous examples the are several different parameters' used in underwriting each "class" or group. The credit card grantor is required to review each class at intervals (I believe approx. every 6 months), to determine if the individual card holders in a class have moved out of or into a predefined class based on economic conditions and the previously defined parameters'.
The Reg. Z, T-I-L disclosure amendments under CCARDA, are complex. Sometime after the full phase in of the various parts of the disclosure requirements under CCARDA, there should be more stabilization of how credit card companies treat their customers. Right now they are and allowed to cut risky credit card account out (close acct.) and reduce limits without notice. They can't (after Aug. 20th) unilaterally raise interest rates without 45 days notice and providing an interest rate increase Opt-Out provision. If exercised by the cardholder, this usually means the card acct. will be closed with the interest rate fixed at the pre-rise rate for the remaining balance, unless the cardholder defaults on minimum payments.
I disagree with the premise that a Notice of Adverse Action applies to any of the CCARDA notification rules as they are now written under the current Reg. Z Part 226 Interim Final Rules.