applicant arrested for forgery and theft by taking. Just how descriptive should you get on HMDA denial 'other' entry?

I think you need to list what was on the AA notice. If you didn't provide the reasons on the AA notice (by giving them a statement that they have a right to the reasons), then I would think you have a bit of flexibility.

From the commentary:
"...which includes reporting the “Other” reason or reasons that were specified on the form by the financial institution, if applicable."

FWIW, I agree.

Adam: What you quoted is from the instructions for using a denial that has reasons listed on it. If the creditor uses the disclosure of the applicant's right to specific reasons (the one without al of the reasons listed where the applicant can request the reasons), the Commentary to .4(a)(16) #3 says:

If a financial institution chooses to provide a disclosure of the applicant’s right to a statement of specific reasons using the model form contained in appendix C to Regulation B (Form C–5, Sample Disclosure of Right to Request Specific Reasons for Credit Denial) or a similar form, or chooses to provide the denial reason or reasons orally under Regulation B, 12 CFR 1002.9(a)(2)(ii), the financial institution complies with § 1003.4(a)(16) by entering the principal reason or reasons it denied the application.

That makes me believe that the lender still has to disclose the reasons for denial on the HMDA LAR - even the "other" reasons.

Agree?

Yes, I agree that they must provide the "other" reason for denial. The point I was trying to make was that if they used the alternative option and didn't write anything on the AA notice, then it could get confusing as to what exactly they must put on the LAR - but I do believe they need to provide an "other" reason if applicable. The flexibility they would have relates to what exactly is listed on the LAR for the "other" reason.

For example, some underwriting worksheets use a narrative to explain the denial. If that were the case, I don't think it would be possible to put the exact language from the underwriting denial narrative and, therefore, it would (probably) be acceptable to abbreviate.

Here is what I am thinking for the "other" reasons:

1) If there is something listed on the denial notice, I would use that exactly.
2) If the bank had an "other" reason but didn't send the reasons to the applicant on the AA notice because they used the alternative disclosure to give them a right to their reasons and the applicant used that right, I would list the reason (as possible) provided to the applicant on any written correspondence (for example - if a letter said "applicant arrested for forgery or theft by taking," then I would list that.
3) If however, the applicant never exercised their rights, and thus the bank never provided a written reason of denial, I would try to use exact language from an underwriting narrative, but that might not be possible depending on the structure and length of the narrative.
4) If there was nothing I could quote from the underwriting worksheet on the LAR, then I would summarize the reason for denial on the LAR.

Agree?

This is why I'm asking.

My belief would align with 4) above. I figure it would be what we would tell them if they asked. FWIW, there IS no underwriting sheet I just have the news report

Then I think you have some flexibility as to what you put on your LAR. What you "would tell them if they asked" is going to be somewhat subjective as, without a paper document to trace it to, an auditor won't be able to validate the reason. That said, I wouldn't write it up as a violation (or even mention anything) as there is really nothing you can do.

Oh it can be validated