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#2054725 - 12/17/15 05:02 PM Commercial Reg B-- AAN, under $1million, all oral?
Cat Henry Offline
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Joined: Oct 2015
Posts: 24
Is there some where that describes whether the underlined part of the notice can be read to the applicant orally at the time of the application or must it be in a form that the applicant can retain? I cannot find authority either way.

(3) Notification to business credit applicants. For business credit, a creditor shall comply with the notification requirements of this section in the following manner:
(i) With regard to a business that had gross revenues of $1 million or less in its preceding fiscal year (other than an extension of trade credit, credit incident to a factoring agreement, or other similar types of business credit), a creditor shall comply with paragraphs (a)(1) and (2) of this section, except that:
(A) The statement of the action taken may be given orally or in writing, when adverse action is taken;
(B) Disclosure of an applicant's right to a statement of reasons may be given at the time of application, instead of when adverse action is taken, provided the disclosure contains the information required by paragraph (a)(2)(ii) of this section and the ECOA notice specified in paragraph (b)(1) of this section

Thanks.

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#2054736 - 12/17/15 05:42 PM Re: Commercial Reg B-- AAN, under $1million, all oral? Cat Henry
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
You need to read all of §1002.9(a)(1) & (2) to understand the differences, expressed in (a)(3), that apply to businesses.
.9(a)(2) states the notification "shall be in writing and contain a statement of the action taken . . . "

You quoted .9(a)(3)(i). This part applies to "small business" (revenues of $1 million or less). It says you still have to comply with (a)(1) and (2) and then provides some exceptions.
What .9(a)(3)(A) indicates you can orally deny them.
What subsection (B) states is the statement of reasons and ECOA notice still have to be given and they have to be given in writing [because that's what .9(a)(1)(2) requires], but you can give it at the time of application instead of when you deny them.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#2054885 - 12/17/15 10:52 PM Re: Commercial Reg B-- AAN, under $1million, all oral? Cat Henry
Cat Henry Offline
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Joined: Oct 2015
Posts: 24
Thank you! and the light dawns.......I wasn't reading the exceptions narrowly enough.

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