If a lender notifies an applicant (residential mortgage app subject to early disclosures) orally that he can not do the loan within 3 business days of receiving the application, does the written adverse action notice also need to go out within the 3 business days? Or could it go out a couple of days later as long as its within 30 days?

§ 1002.9 Notifications.
(a) Notification of action taken, ECOA notice, and statement of specific reasons. (1) When notification is required. A creditor shall notify an applicant of action taken within:

(i) 30 days after receiving a completed application concerning the creditor's approval of, counteroffer to, or adverse action on the application;

(ii) 30 days after taking adverse action on an incomplete application, unless notice is provided in accordance with paragraph (c) of this section;

(iii) 30 days after taking adverse action on an existing account; or

(iv) 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered.

Based on the TIL commentary, it does not indicate that any immediate notice has to be sent out, and ECOA (like JWills indicated) gives 30 days.

Commentary 19(a)(1)(i)
4. Denied or withdrawn applications. The creditor may determine within the three-business-day period that the application will not or cannot be approved on the terms requested, . . . . . In that case, or if the consumer withdraws the application within the three-business-day period, the creditor need not make the disclosures under this section.

JWills and Rocky are right. You'll want to document that the applicants were denied within 3 days to stop the disclosure timeline. The loan officer should notify the applicants verbally of the decision. The paperwork (AAN) can be sent up to 30 days after.