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#2178032 - 05/14/18 07:54 PM ECOA Completed Application - Approval
IGaev Offline
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Joined: Dec 2016
Posts: 55
Does a conditional approval with outstanding creditworthiness conditions constitute an "approval" under ECOA?

ECOA, from what I can see doesn't have a clear definition for approval. I want to ensure that we do "not" have to wait until only customary closing conditions remain.

Thank you in advance for the guidance.

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Fair Lending
#2178037 - 05/14/18 08:28 PM Re: ECOA Completed Application - Approval IGaev
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
ECOA is more flexible - or unclear - as you stated. Reg B does not define "conditional approval" and doesn't care about about customary closing conditions (or creditworthiness conditions). Might I ask why does this matter? Is there a scenario you can provide?

First, Reg B doesn't get into Approved Not Accepted, so I'm not certain why this matters under Reg B. Second, you can have different action taken results for Reg B & Reg C (Denied vs. ANA or Withdrawn vs. ANA, respectively). If you're trying to get Reg B & C to line up in all cases, you can't.
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David Dickinson
http://www.bankerscompliance.com

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#2178338 - 05/16/18 04:01 PM Re: ECOA Completed Application - Approval IGaev
IGaev Offline
Member
Joined: Dec 2016
Posts: 55
We're evaluating whether we've met ECOA's timing requirements for notifications. 1002.9(a)(1) The regulation states notification of approval may be express or by implication. For example, the creditor will satisfy the notification requirement when it gives the applicant the credit card, money, property, or services requested.

It does not reference conditional approval (customary or with outstanding creditworthiness conditions) as an approval. When calculating the 30 day requirement from application or completed application, how would we define "approval"? The above referenced definition appears to suggest that it's a final approval (i.e., customary closing conditions).

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#2178416 - 05/16/18 08:12 PM Re: ECOA Completed Application - Approval IGaev
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
You're right that Reg B does not reference conditional approvals. If you say "If everything checks out, we can make you this loan". I believe you've met the Reg B 30 day timing requirement. So to go back to your original question ("Does a conditional approval with outstanding creditworthiness conditions constitute an "approval" under ECOA?") - yes, I think that's fine.
_________________________
David Dickinson
http://www.bankerscompliance.com

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