In Reg B section 1002.16(c) is states that if once we discover an error relating to 1002.9 we shall correct it as soon as possible. The timing requirement at this point can't be fixed, but is it ever too late to send someone an adverse action notice? Or should we always send one no matter when we discover the error along with a cover letter?

Thanks!

I do believe there's a tipping point where i wouldn't send an adverse action (for an extreme example, i'm pretty sure i wouldn't send one if i discovered a 1999 application hadn't been properly dispositioned)......but short of those extremes, yes, i'd send the AAN, even late.

Anything discovered since your last compliance exam should be provided the AAN.

I have seen the regulators go back the entire 25 month retention period for applications under Regulation B and longer for one bank that was not destroying applications on a timely basis after the end of the regulatory retention period. .

And in that we get a good reminder that banks that don't purge records like these once the required retention period has passed are risking citations on errors made before the last exam. "The last exam didn't mention it" doesn't cut it as an excuse.

Amen to that Brothers Randy and John. I've seen it several times.
Also make sure both paper and electronic files are deleted.

I worked many years ago at an institution that the CEO liked to keep records longer than needed. He said it helped someone during divorce and that was a good reason to keep it... After the next exams findings we had a purge process in place and the CEO was in a very bad mood for some time.

Not providing timely and accurate AANs findings in an exam is what got me hired at my current job. We only had to look back to the date of the last exam but as Randy & John notes you could very well have to look back the the full retention period.

Amen to both of these points. Failure to destroy timely was the second thing I had to tackle when I moved back into fair lending from credit. (The first thing was a DOJ referral, which was both why I got pulled back into fair lending and how I discovered the failure to follow the record retention policy.)