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#2121515 - 03/10/17 01:39 PM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
David Dickinson Offline
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Registered: 11/28/00
Posts: 17580
Loc: Central City, NE
Quote:
@David - As a former OCC examiner, I will have to watch my cutting comments about the FDIC out of respect for you going forward.

smile
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#2122576 - 03/18/17 03:41 PM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
Rocky P Offline
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Registered: 06/24/03
Posts: 6609
Loc: South Carolina
I'll agree with the others Randy, Dan, Dave, etc. - former FDIC, lending compliance since 1986, Fair Lending by a baptism of fire 2 years later, etc. You can add to an application, but when you take someone off, it is a different request for credit, because as stated above, someone is preventing the loan from approval.

If your boss wants another opinion, there are many good COMPLIANCE attorneys that will provide one. BOL is trying to help cut down on $500/hr attorney fees. (For gosh sakes, don't refer her to a RE closing attorney an ambulance chaser - not when the fines and penalties can run into 6-7 figures.)

Exams from a fair lending standpoint - if they are looking at comparable files and select your one in question (and notice it), it could trigger a larger search. Sometimes, they regulators the creditor document the exceptions, with regulator oversight, each file found being an ECOA violation. Oh, they will go back to the last exam they tested, so it may be a while. Also, the 25 month clock will come to a stop - telling the creditor not to destroy any files.
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#2143426 - 08/24/17 10:05 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
JPC Offline
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Registered: 10/22/15
Posts: 1002
Follow up on this topic, though outside of this Regulation (please forgive), what do you do with the denied applicant from a HMDA standpoint? Do you report the joint application as denied and then move forward with the counter offer under a new loan application, which you would later report as Originated if applicable? Or, do you just treat it as 1 loan number and report it as originated and leave the specific denied applicant off of the HMDA-LAR?


Edited by Justin C. (08/24/17 12:34 PM)

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#2145473 - 09/09/17 07:15 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
David Dickinson Offline
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Registered: 11/28/00
Posts: 17580
Loc: Central City, NE
It depends on what you did:
1. You denied the entire application and told the "approved" applicant to start over. If so, report the first application as denied and then you'd have another LAR entry with the new application.
2. You'd issue a denial (Reg B) to the denied applicant, but you're the application is still moving forward with the counter-offer to approve the other applicant. If you made this loan to the "approved" applicant, you'd enter the application as approved on your HMDA LAR.
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#2145499 - 09/11/17 10:36 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: David Dickinson]
JPC Offline
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Registered: 10/22/15
Posts: 1002
Thank you David. So, in Scenario 2, you would send the AAN, but you wouldn't actually report that piece for HMDA purposes, correct?

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#2145524 - 09/11/17 12:17 PM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
David Dickinson Offline
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Registered: 11/28/00
Posts: 17580
Loc: Central City, NE
Yes. You owe the denied applicant an AAN, but you counter-offered the application and it was accepted. Thus, it was approved for HMDA.
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#2148356 - 10/02/17 05:07 PM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
InFairness, CRCM Offline
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Registered: 11/01/10
Posts: 241
Loc: USA
Originally Posted By Justin C.
Otherwise 12 CFR 1002.2(c) states that adverse action means: "A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered."


The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all.
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#2148578 - 10/04/17 10:46 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
David Dickinson Offline
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Registered: 11/28/00
Posts: 17580
Loc: Central City, NE
Quote:
The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all.

That may be your opinion, but I disagree. Please show me a regulatory advisory/comment that backs this up.

Read my post from 9/9/17. I agree with you if you denied the application (an option) and told the "approved" person to start over. I disagree if you offered a counter-offer and they accept.
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#2149142 - 10/09/17 09:33 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
Dan Persfull Offline
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Registered: 08/28/02
Posts: 44891
Loc: Bloomington, IN
The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all.

I'm not sure what InFairness' intent was with this statement but I agree with David. If a counteroffer is made and accepted, regardless of the counteroffer's terms, then adverse action was not taken against the applicant or applicants that accepted the counteroffer.

1002.2(c) states the refusal to grant (not offer) credit is adverse action UNLESS a counteroffer is made and the applicant accepts the counteroffer.
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#2149376 - 10/11/17 09:30 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
InFairness, CRCM Offline
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Registered: 11/01/10
Posts: 241
Loc: USA
The denied applicant does not have a credit offer to accept. That person did not receive credit, and so needs an AAN. I have seen multiple institutions cited by both the FRB and the CFPB for this.
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#2149393 - 10/11/17 11:00 AM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
David Dickinson Offline
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Registered: 11/28/00
Posts: 17580
Loc: Central City, NE
I represent hundreds of clients and have never seen this cited. As I stated in my previous post: Please show me a regulatory advisory/comment that backs this up. That multiple institutions have been cited, doesn't make it correct.
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David Dickinson
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#2149718 - 10/13/17 12:34 PM Re: Denying 1 of Multiple Applicants - AAN? [Re: JPC]
JPC Offline
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Registered: 10/22/15
Posts: 1002
InFairness - The thread seemed to already agree that you issue an AAN to the denied party from the joint applicants. I think we're talking over each other here. Unless, you are saying that both applicants should get a denial and starting the application over with a single applicant is the only way to go.

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