We had an application for a HELOC that was withdrawn the day after we received the application. The Bank doesn't charge any fees for HELOCs. The appraisal was ordered on the day of application and apparently never canceled after the withdrawal. The bank received the appraisal about a week after the application was withdrawn. It is now coming up in an audit that we didn't provide a copy to the applicant. It was a 1st lien HELOC. Would we be required to provide a copy to the applicant in this case?

1002.14(a)(4) Withdrawn, denied, or incomplete applications. The requirements set forth in paragraph (a)(1) of this section apply whether credit is extended or denied or if the application is incomplete or withdrawn.

There is nothing in the Reg B § 1002.14(a) requirement for providing a copy of the appraisal that would allow your bank to avoid providing a copy, even though the application was withdrawn the day after it was received. If you disclose that you do not charge fees for such a loan, you cannot require the applicant to pay for the appraisal as a condition of getting the copy.

Curious on any opinions on benefits of sending a copy now, this happened about a year ago. Either way we missed the regulatory timing for sending it, so no curing that. I am not sure there is much benefit to the applicant at this point.

Your regulator would probably not agree with that position. You owe them a copy. That would be like saying you owe me $100, but since it is a year-old debt - you are just going to decide to not pay me.

Fair point. The $100 does have clear value either way. I was thinking that for me personally- a year old appraisal wouldn't have any value, but I guess that isn't my place to decide for someone else.