Under the latest Reg B amendments, must the adverse action notification specifically designate whether the request was denied because of the primary applicant, joint applicant or guarantor's creditworthiness (or lack thereof)?

Yes. You must give specific reasons for denial. If you "bankruptcy" you have to tell me who you are referring to, don't you?

I understand you have to be specific regarding the credit reason (e.g. can NOT use "Does not meet bank minimum credit score") per 12 CFR 202.9(b)(2), but does that really mean the lender has to indicate whether it was the applicant's credit vs. the co-applicant's?

Let's say Dave (me) and John apply for a loan together and John has a bankruptcy. If you send an AAN to Dave & John that states "bankruptcy". Do you think that this is accurate and specific?

Do you think I might be confused?

I agree 100% with David. Go to this document and go to page 9 and read 9(b)(2) Statement of Specific Reason.

Thanks for the link - but I'm going to ask this question just because I seem to be struggling with this. If I have an applicant and co-applicant both intend to be joint credit and they both have bad credit (not necessarily the same bad credit)and I send them both an AAN do I state to the applicant that the co-applicant has a "bankruptcy" and do I state to the co-applicant that the applicant has a "judgment". Do I tell them both each others reasons for denial or just the applicant? I understand that with a guarantor, co-signer or endorser that you inform the applicant but not sure if it is joint credit being denied.

In the case of joint applicants you are still only required to provide the AAN to the "primary" applicant, however each would require a FCRA notice.

I checked with our regulator (the FDIC) & they were in agreement with you. I also agree it makes better sense to include the primary or joint designation as I believe it would be less confusing overall (except for the fact that the consumer with the bankruptcy would unquestionably know).

But when I read the cite & the commentary [12 CFR 202.9(b)(2) see below], I read regardless of who has the lack of creditworthiness, I must be specific as to the reason, not necessarily the individual.

"Statement of specific reasons.
The statement of reasons for adverse action required by paragraph (a)(2)(i) of this section must be specific and indicate the principal reason(s) for the adverse action. Statements that the adverse action was based on the creditor’s internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditor’s credit scoring system are insufficient."

"Section 202.9(b)(2), adopted as proposed, clarifies that whether a creditor's denial of credit is based on the creditworthiness of the applicant, a joint applicant, or guarantor, the reasons for adverse action must be specific ."

I'm still new to compliance & still straining at gnats. Thanks for helping me choke them down.

I don't disagree that this section says that the reasons must be specific, but I ask you "specific to whom?" Again, I present the scenario in my second post. Do you think that this would be accurate? Would it meet the specific requirement? Would your customer be confused (probably the best question)?

If I may interject - I have a very similar question. Joint applicants, bad credit on primary only. Adverse action notice can go to just primary. FCRA notice must go to primary. My question is can we send combined Reg B and FCRA notices to both? Is there a prohibition against notifying co-applicant in this case of the bad credit of the primary? Thanks