Under ECOA's Reg B, the adverse action definition [Reg B 202.2(c)] excludes -- and therefore no AdvActn notice is needed on -- an expressly accepted counteroffer. For ex., if a bank offers an applicant $10,000 instead of the requested $20,000, and the applicant accepts the deal. Question: under FCRA, if a consumer report contributed to the lessened loan amount, would that be AdvActn and would an FCRA denial notice be necessary?

It appears yes, but I hope I'm missing something. FCRA's definition in 603(k)(1)(A) says AdvActn has the same meaning as in 701(d)(6) of ECOA, which doesn't contain the counteroffer exclusion language; that exclusion language is only in Reg B. While it's not officially applicable any more, in the old FCRA Q&A, Q5 says a counteroffer, due to derogatory info in a consumer report, is a denial.

I thought I remembered a staff opinion letter that relieved the situation, but I've searched the FTC site and don't find one.

The FCRA now means the same thing as Regulation B. FTC has informally explained that the reference to the ECOA itself incorporates any regulations and interpretations issued. So an accepted counteroffer is an approved loan for FCRA as well as ECOA purposes.

Am I correct to say that neither an ECOA notice nor an FCRA notice would be required in the following:

John (borrower) applies for credit with Josh (co-borrower) but we can't make loan because of Josh's credit. So John finds another co-borrower, Jim, and we make the loan to John and Jim. I don't need to send Josh a FCRA notice do I?

I think you would need to send an adverse action notice (with both Reg B and FCRA language) to Josh. The purpose of the FCRA notice is to give Josh the opportunity to know whether there is erroneous information in his credit report that led to the decision the bank made.

I would think that an AA letter in this case would actually be sent to John, as he is the primary applicant and it was the initial request that was turned down due to his choice of co-applicant. He then found another co-borrower, so there was actually not a counteroffer, the original loan request was turned down. When John resubmitted with a new co-borrower, that was in actuality a new loan request, not an acceptance of a counteroffer. This is how I would read this situation - wouldn't stake my job on it, but simply my opinion.

I agree. If Josh was a guarantor, he wouldn't necessarily have the rights of a co-applicant, but in this scenario he he does, since he is. You denied the request because of his credit and as noted, the spirit and intent is to allow erroneous entries to be corrected.

I would classify a new set of applicants as a new loan request as a decision had already been made.

And to clarify, I am not saying that Josh should not receive an AA also, I just know with many automated loan underwriting systems, it is not always possible to send the letter to just the secondary applicant. But I am glad to see Andy agrees that this is a new loan request, because Andy is "the man".