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#2258362 - 08/18/21 03:43 PM Application Received - Loan Not Offered - AAN?
TeamComply Offline
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Joined: Aug 2016
Posts: 392
Bank receives an application from a consumer (through our online portal), so its an online application, and under loan purpose applicant indicates: "Other" and states "school/tuition expenses". We do not offer "private education loans" so are we required to send an AAN in this situation, since we don't offer this type of loan? Is it the submission and receipt of a written application from a consumer that triggers an AAN be provided? Or could we verbally tell them we don't off this type of loan?

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Lending Compliance
#2258580 - 08/24/21 01:36 PM Re: Application Received - Loan Not Offered - AAN? TeamComply
TeamComply Offline
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Joined: Aug 2016
Posts: 392
Anyone? If you receive an application for a product you don't offer do you provide an AAN or how do you handle this?

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#2258584 - 08/24/21 02:27 PM Re: Application Received - Loan Not Offered - AAN? TeamComply
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 320
1) I don't think Reg B requires it, but the terms/type of credit debate was always a little grey to me.
2) I would send the AAN.

1002.2(c)(2)The term [Adverse Action] does not include: [...] v. A refusal to extend credit because the creditor does not offer the type of credit or credit plan requested.

Comment 1. Terms of credit versus type of credit offered. When an applicant applies for credit and the creditor does not offer the credit terms requested by the applicant (for example, the interest rate, length of maturity, collateral, or amount of downpayment), a denial of the application for that reason is adverse action (unless the creditor makes a counteroffer that is accepted by the applicant) and the applicant is entitled to notification under ยง 1002.9.

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#2258718 - 08/25/21 08:02 PM Re: Application Received - Loan Not Offered - AAN? TeamComply
MJ Offline
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Joined: Jun 2008
Posts: 22
Texas
I agree that it is not required but not responding is just not kosher and officially closes out the application. We also do not offer education or education related loans at this time. We do send adverse action notice that states: We do not grant credit on the terms and conditions requested. If you want to get technical and speak to the "type" of credit then I wouldn't see a problem with "We do not offer the type of credit or credit plan requested" which actually makes more sense.

Another thought, limit the choices for loan purpose not allowing for a free form field. We are going to attempt the following for consumer non-real estate online portal. Any input is appreciated. Note a few of them will activate particular templates based on selection: Purchase Auto, Purchase Motorcycle, Refinance, Purchase RV, Purchase Watercraft, Home Improvement, Debt Consolidation, Consumer Goods, Life Event, Medical-Healthcare, Personal Expense, Personal Investment, Recreation-Entertainment and Unplanned Emergency.

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