Adverse Action Reasons

I've been reviewing a denial notice where the lender chose "customer applied for consumer credit counseling" as the sole reason for denial. I definitely don't think that this was the proper way to document this; however, can anyone tell me if this is a violation of ECOA or just a poor choice of words? Thank you.

I'm going to opine that it's a violation of ECOA, but not for the reason you might suspect.

The true reason this applicant was denied, I suspect, is that the applicant was overextended or had not handled credit well (thus the request for counseling). If that's the true reason, that's what should have appeared on the AA notice.

Failure to provide the specific reason for the AA is the violation that I see here.

This "reason" is right up there with "customer withdrew" when the customer said that after being told about a counteroffer or probable denial. The notice you reviewed describes what happened but not why. The adverse action reason must answer the why question -- why did the customer choose credit counselling? The notice serves no purpose if it merely tells the customer what the customer did. It is supposed to tell the customer what the creditor did!