I understand that the action taken code you use depends on the notice that is sent to the borrower in this situation. If you send a notice giving the borrower x days to provide the information or the application will be considered closed, the action taken would be 5. If you send an adverse action notice and deny the application because it is incomplete, you would use an action taken of 3, denial reason of 7. What if you do both? When if after x days has passed you send a denial for incompleteness? Would the action taken be 3 or 5?

If you sent the notice of incompleteness as discussed in 202.9 there is no further notification requirements if they don't meet the deadline and it would be coded closed for incompleteness (code 5).

If you gave a verbal notice of incompleteness and sent the AAN after the verbal notice expired you treat it as a denial (code 3).

If you provided the "written" notice of incompleteness and also sent an AAN after the deadline I would still report it as a code 5 because the requirement for that code was met first.