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#593228 - 08/03/06 11:22 PM Reg B-Denied or withdrawn applications?
Wilson Offline
New Poster
Joined: Jun 2005
Posts: 15
Scenario:The bank approves an application for a car loan pending acceptable collateral. The applicant decides they do not want the loan because they received a better rate at another institution. What action would we take on these types of loans?

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Lending Compliance
#593229 - 08/04/06 12:42 PM Re: Reg B-Denied or withdrawn applications?
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,965
Bloomington, IN
You took no adverse action, therefore there is no notice requirements under 202.9.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#694196 - 02/27/07 10:17 PM Re: Reg B-Denied or withdrawn applications? Dan Persfull
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
Bank is working on a more automated way of documenting withdrawn applications and wants to use the two following reasons. The second one I believe I am ok with as a withdrawn reason however I'm questionning #1. If the bank does not offer a certain type of loan request there is no adverse action, but if the bank does not offer the terms requested wouldn't that be adverse action and a notice required to be sent?

#1-Customer has found more favorable terms with another bank.
#2-Customer has found more favorable rate with another bank.

Appreciate any thoughts.

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#694214 - 02/27/07 10:37 PM Re: Reg B-Denied or withdrawn applications? Jan94
Al Miller Offline
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Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
First, I recommend that all application be closed using the HMDA Action Codes (even if not HMDA) using the KISS theory. Then this application would not be "withdrawn" because a credit decision was made.

If the applicant justs requests a loan and it is approved at your "standard" rate and the applicant goes away for a better rate, it would be Approved, Not Accepted.

If the applicant requests 4% APR and you are unwilling to give that rate, it would be a denial.

Very few, if any, files would be closed as "withdrawn".

Al
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Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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#694582 - 02/28/07 05:00 PM Re: Reg B-Denied or withdrawn applications? Al Miller
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
Thank you Al. I appreciate your response, it was helpful.

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