In the following scenario, what would be the Reg B action taken and what notice, if any, would be provided to the applicants?
The application is for a construction loan. A completed application was received in March. Conditional approval was documented and communicated in April. The only condition not met at the end of May was to have 10% cash reserves in a bank account. The loan officer and applicants had ongoing communication in June and July; however, the applicants did not agree with certain language that would be in the Note and did not agree with the bank’s requirement for a 10% cash reserve. The bank would not make concessions on either of those items. The applicants stopped communicating with the bank at the end of July.