If we sent a notice of incomplete within 30 days and it gave an expiration date of 30 days, are we out of compliance if we do not send a denial notice until a few months after the expiration date given on the NOI?

If you use the model form or similar language (see Sample C-6 in the link below), the notice of incomplete is your denial. You told them you couldn't approve their loan request because you needed additional information, and you told them when you needed it by in order to reconsider. If they haven't given you the information, you are done. There is no need to issue a separate "you are denied because you never answered us" letter.

https://www.bankersonline.com/regulations/12-1002-appc

Also - if you sent a Notice of Incomplete and then close out the application because the applicant did not furnish the requested items, then you can report Action Code 5 (File Closed for Incompleteness).

HOWEVER, if you send an Adverse Action notice that says the application is being declined with a denial reason of "Application Incomplete", THEN you need to report Action Code 3 (Application Denied by Financial Institution), and depending on your charter, you may have to report a denial reason.

I don't know about you, but since stats can get skewed for Fair Lending review, I would rather report incomplete apps as Closed Incomplete rather than adding to the Denial statistics.

HMDA Guide to Getting it Right - Page A-3
e.Use Code 5 if you sent a written notice of incompleteness under § 1002.9(c)(2) of Regulation B (Equal Credit Opportunity) and the applicant did not respond to your request for additional information within the period of time specified in your notice. Do not use this Code for requests for preapproval that are incomplete; these preapproval requests are not reported under HMDA.

HMDA Guide to Getting it Right - Page A-3
F. Reasons for Denial.
1. You may report the reason for denial, and you may indicate up to three reasons, using the following Codes. Leave this column blank if the “action taken” on the application is not a denial. For example, do not complete this column if the application was withdrawn or the file was closed for incompleteness.
Code 1—Debt-to-income ratio
Code 2—Employment history
Code 3—Credit history
Code 4—Collateral
Code 5—Insufficient cash (downpayment, closing costs)
Code 6—Unverifiable information
Code 7—Credit application incomplete
Code 8—Mortgage insurance denied
Code 9—Other

Having a brain lapse......we sent a proper notice of incomplete application.....after receiving the notice the applicant called us to tell us that they would not be giving us the information and expressly withdrew the application.....this can be reported as a withdrawn application...is that correct?

bump.....for some reason I'm still stuck on this....can anyone please confirm that this is reported as withdrawn and not incomplete......Thanks for any help!

As long as the applicant withdraws prior to the drop dead date in the NOI I would report as withdrawn.

Agree, (as if that is necessary) they withdrew before the NOI expired, and before the creditor made a decision. The customer's withdrawal came first.

Thanks so much!!!!!!!