For all commercial credit, regardless of revenues, we provide the disclosure of an applicant's right to a statement of reasons at the time of application. That being the case, all loan dispositions, whether approved, declined, or if we need additional information to complete an application are provided orally. For incomplete applications, in the event that we do not receive all information to make a credit decision, we were under the impression that by providing the disclosure of the right to receive the statement of reasons at application, that would suffice and we would not have to send any additional AAN denied for incompleteness. However, I have since received mixed feedback on how to treat incomplete applications. I've been told that for gross revenues over $1 mill, you do not need to do anything additional and that the disclosure at application and the oral request for information to complete the application would suffice. For gross revenues under $1 mill, I've been told that we either need to send a Notice of Incompleteness identifying all items needed; or if we communicate what items we still need to the applicant verbally, we still need to send an AAN denying for incompleteness if we do not receive those items. I'm not certain I agree because again, we provided the Disclosure of the right to receive the statement of reasons at application.
Clarification would be appreciated.

It would be great to hear from others. I see the loop we may be dealing with so curious of other's thoughts as well. Here are my thoughts...

First, are you a small creditor?

1002.9—Notifications.
(d) Oral notifications by small-volume creditors. In the case of a creditor that did not receive more than 150 applications during the preceding calendar year, the requirements of this section (including statements of specific reasons) are satisfied by oral notifications.

Second, conservatively reading the text, I would send it. :

1002.9—Notifications.
(c) Incomplete applications.
(3) Oral request for information. At its option, a creditor may inform the applicant orally of the need for additional information. If the application remains incomplete the creditor shall send a notice in accordance with paragraph (c)(1) of this section.

Official Interpretation
9(c) Incomplete applications.
Paragraph 9(c)(3).
1. Oral inquiries for additional information. If an applicant fails to provide the information in response to an oral request, a creditor must send a written notice to the applicant within the 30-day period specified in §§1002.9(c)(1) and (2). If the applicant provides the information, the creditor must take action on the application and notify the applicant in accordance with §1002.9(a).

Consider providing the notice electronically:

Consumer Compliance Outlook, Fourth Quarter 2013
Overview of E-Banking Compliance Considerations
Consumer adverse action notices provided electronically are subject to the E-Sign Act’s consent requirements.[12 The consent requirements only apply to disclosures that must be provided in writing. For the required notices in §1002.9(a), only consumer adverse action notices must be provided in writing. The other notices can be provided electronically without regard to the consent requirements.]

BOL Thread: Notices of Incompleteness/AA Sent Electronically
Deliveries of electronic documents (regardless of content) to businesses are rarely covered by federal regulations. Even if it's a federal document that must be "written", you don't need to go through ESIGN's demonstrable consent steps--they only apply to consumers. Operating under state UETAs, you simply reach an agreement with the customer and then proceed with the e-delivery.

If you have provided the notice with the application in a form they can keep then your verbal notification is sufficient.

You are under no regulatory obligation to provide a notice of incompleteness, you do however have to communicate your decision to the applicant.

1002.9(a)(3)

(i) With regard to a business that had gross revenues of $1 million or less in its preceding fiscal year (other than an extension of trade credit, credit incident to a factoring agreement, or other similar types of business credit), a creditor shall comply with paragraphs (a)(1) and (2) of this section, except that:

(A) The statement of the action taken may be given orally or in writing, when adverse action is taken;