Let's say there is a customer who is a dentist and he does $1.3 to $1.4 million in business each year. Because of the way that insurance companies pay him, his billable income is reduced to below a million dollars each year.

If we were to deny a request for credit and the officer is not wanting to send out an adverse action letter because he has already notified him personally. Does the regulation require the adverse action letter in a case like this?

Is this a consumer or business loan?

Is the loan request a business purpose or a consumer purpose?

The Reg. looks to gross income reported in the preceding fical year, not billable income.

202.9(a)(1) for consumer. An AAN is required regardless what the loan officer wants.

202.9(a)(3) for business. The key is did you provide him the proper notice that he has the right to request the reasons for denial.

This loan is a business purpose loan.

in addition to what has already been posted, look to your institution's policies/procedures. You might receive criticism from your examiners if your policies/procedures do not match actual practice.

Just a thought.