I've heard various interpretations that §1002.12(b) (Reg. B record retention) extends to requiring some type of documentation relating to each principle reason stated on adverse action notices. In other words, if "value of collateral is insufficient" is a reason, then some type of valuation should be maintained. Would that be a correct interpretation, and if so how far should it be taken?

If I were to see "income insufficient for credit requested," should I expect to see a DTI calculation somewhere in the file if the creditor's policy defines ratios? Or would general information evidencing income and a credit report evidencing outstanding debts be sufficient? This is just another example.

I realize the purpose of the record retention requirements of Reg. B is to maintain records for review purposes beyond just the technical requirements, but my question is mainly concerned with just that.

Let me put it this way. If you get into a fair lending review, would you like the regulators to recalculate the DTIs or LTVs for you on these loans for comparison purpose or would you like for them to rely on the documentation file?

In other words, you want each and every reason fully documented in file.

I agree with Randy 110%. If you have paper or electronic files, one of the forms that is usually created by the LOS is an underwriter's worksheet with all the loan information - a recap of all pertinent information. This should be available - so an examiner can look and see the same thing as the underwriter making the decision.

You do NOT want an examiner sniffing around the files and coming up with a different decision because they interpreted any of the underwriting characteristics (or bank policies) differently. Lay out exactly what the underwriter used in making the decision.