Do you have to give a borrower notice of a right to receive an appraisal on Commercial loans when a residence is being offered as collateral if the bank does not do an appraisal or if the loan is declined? If so, where can I find it in the regulation?

My opinion: Reg. B applies to both business and consumer purpose loans. Per 1002.14(a), you're not required to give a notice of the right to receive an appraisal; instead, you can provide appraisals via "routine delivery."

If you go the "routine delivery" route and the bank doesn't use an appraisal, then you should be fine. If you go the "routine delivery" route, use the appraisal, and decline the application, then you'd still have to send the appraisal per 1002.14(a)(1).

If you go the "notice route," then you'd have to give said notice whether or not you got an appraisal (because this is an application for credit secured by a lien on a dwelling), and you'd have to do so before issuing the adverse action notice in the case of a decline.

dac: Remember that for this section of Reg B, "the term appraisal report means the document(s) relied upon by a creditor in evaulating the value of the dwelling." For my bank, that could be an in-house evaluation, too.

And....this section is changing effective January 18, 2014. Alphabet Soup has the revised 1002.14 out there right after how it reads now.

Currently, we provide the notice until 1002.14(a)(2)(i) and we send it with the adverse action if we haven't given it beforehand.