Skip to content
BOL Conferences
Thread Options
#774870 - 07/13/07 07:24 PM Adverse Action Reasons-Joint Applicants
C2 Offline
Junior Member
Joined: Jul 2005
Posts: 26
GA
When preparing an adverse action letter for joint applicants, do the reasons for both applicants go on the letter and a letter go to each applicant. In other words, Applicant A has slow credit with others and collection accounts and Applicant B has bankrupcy and excessive obligations. Do all 4 reasons go on one letter and a letter with all reasons be addressed to each applicant?

Return to Top
Lending Compliance
#775573 - 07/16/07 02:01 PM Re: Adverse Action Reasons-Joint Applicants C2
LoisLane Offline
Diamond Poster
LoisLane
Joined: Oct 2001
Posts: 1,570
Wisteria Lane..
The applicants need to understand which denial reasons apply to each of them.

If your form allows for a disclosure for each applicant (ie. Anthohy denied because of slow credit and collection and Betty denied because of bankruptcy and excessive obligations) you can use one form.

If your form doesn't allow for dual disclosures, use a seperate form addressed to each applicant.
_________________________
And where is Superman when I need him?

Return to Top
#775625 - 07/16/07 02:28 PM Re: Adverse Action Reasons-Joint Applicants LoisLane
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
For joint applicant we use a legend. A = appliant C = co-applicant. Then beside the applicable reasons we put A, C, or AC.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#848454 - 11/02/07 08:03 PM Re: Adverse Action Reasons-Joint Applicants Dan Persfull
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
I've had a question come up about putting the name of the applicant on the adverse action notice whose credit ended up causing the denial. I can't find anything that would necessarily prohibit this, but I am not in agreement with doing it.

Dan, have you had any comments on your procedure from anyone (i.e. an examiner for instance)? I think I may share this with our group in lieu of putting someone's name on the form.

Return to Top
#848551 - 11/02/07 08:57 PM Re: Adverse Action Reasons-Joint Applicants Jan94
Carl R. Offline
New Poster
Joined: Sep 2007
Posts: 18
Perhaps this is too risky, but we've always followed Reg. B literally:
"(f) Multiple applicants. When an application involves more than one applicant, notification need only be given to one of them but must be given to the primary applicant where one is readily apparent."

We provide: one adverse action notice; listing all reasons for denial (but no more than four) without disclosing who was accountable for the adverse information. As an aside, there's not much guidance in the Commentary.

Of course, the rules changed not too long ago with respect to cosigners.

Merely my opinion...

Return to Top
#848562 - 11/02/07 09:04 PM Re: Adverse Action Reasons-Joint Applicants Carl R.
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I believe the intent of Reg B is to make it clear concerning what reasons apply to whom. I believe Reg B's "reasons must be specific" requirement is what makes this clear. However, several of our clients don't list "A" or "CA" as Dan suggests (I agree with him). None of these banks have been criticized from their examiners (as Carl is stating).
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top

Moderator:  Andy_Z