When an Adverse Action is taken on a business (where FCRA is not applicable), can we use the key factors in the credit report affecting the credit scores as the reasons for denial under ECOA?
We receive FICO Small Business Scoring Service (FICO SBSS Score) which is a combined score on the owner (consumer) and the small business. FICO provides us with the key factors affecting the credit scores for both the owner (consumer) and the business.

I am not aware of anyone that bothers giving reasons on business credit up front.

we do provide written AAN for Small Business Loans and since the reasons for denial come from the combined credit report, we wanted to use the same reasons as ECOA reasons. it involves mapping the factors affecting the credit score to the ECOA reasons within the system to auto-populate the AAN.

Well, if you choose to do it - then your entire credit decisioning process would have to be based on the credit report and no other factors that may have contributed to the denial.

Just to clarify, Randy is referencing the option in 1002.9(a)(2)(ii) and 1002.9(a)(3) where financial institutions are not required to provide the specific reasons for denial, unless requested by the customer - meaning you don't have to provide the Reg B denial reasons on your adverse action notices. Specifically, 1002.9(a)(2)(ii) permits, as an alternative to providing the specific reasons, to provide a statement of the applicants rights to receive the specific reasons upon request from the lender. 1002.9(a)(3) permits lenders to provide the statement of specific rights at the time of application.

For reference, 1002.9(a)(2)(ii) provides this alternative to providing a statement of specific denial reasons on the adverse action notice: (ii) A disclosure of the applicant's right to a statement of specific reasons within 30 days, if the statement is requested within 60 days of the creditor's notification. The disclosure shall include the name, address, and telephone number of the person or office from which the statement of reasons can be obtained. If the creditor chooses to provide the reasons orally, the creditor shall also disclose the applicant's right to have them confirmed in writing within 30 days of receiving the applicant's written request for confirmation.

Also for reference, 1002.9(a)(3) provides this relief for adverse action notices for business applicants: (B) Disclosure of an applicant's right to a statement of reasons may be given at the time of application, instead of when adverse action is taken, provided the disclosure contains the information required by paragraph (a)(2)(ii) of this section and the ECOA notice specified in paragraph (b)(1) of this section;