We have a declined loan where the application was received on 4/28/16 for HELOC. The bulk of the underwriting was complete. On 5/20 the applicant contacted the bank with information that required us to decline the request. The applicant was notified verbally at that time and a written notice was provided on 6/3/16. Our external auditor is stating that we did not take action within 30 days.

We just went through an OCC Exam and they had a similar finding. The difference was that communications where the date received on an application and the decline notice was provided was greater than 30 days. They said if there would have been documented communications that it wouldn't have been an issue.

This is how we planned to address the issue, which was my rebuttal to the auditor. That the 5/20 communication was within 30 days of application and 30 days of denial. There are many loan types such as RE, Commercial that take longer than 30 days to close. We don't always issue a commitment letter nor document a verbal. What are other banks doing? Are we off base in our approach?

As a follow up the guidance states that approval may be express or by implication. Are we to always document that it is approved on such date or conditionally approved pending? Seems like overkill.

On 5/20 the applicant contacted the bank with information that required us to decline the request. The applicant was notified verbally at that time and a written notice was provided on 6/3/16.

Where is the 30 day gap? You notified them in 14 days after receiving the information which caused the denial. Find a new external auditor.

Randy is correct!

To say it a different way, you didn't have a completed application until 5/20; therefore, the clock resets.