Returned Mail

We have been receiving returned Adverse Action notices due to incorrect addresses. We keep a copy of the mailed notice for the bank's record retention purposes, but operations wants to know if they have to keep the returned notices. Does anyone have a procedure for this? Thank you.

Our procedures are to the recheck the address on the application to the adverse action notice. If this is correct, operations makes a photocopy of the envelope showing the letter was returned and staples it to the back of the AA notice that we retain. This demonstrates to the examiners that we made a good faith effort to notify the customer. So far, no complaints from them.

Does this not make you suspicious (as in SAR)?

I would put the return mail in the denied loan file and keep it the standard 25 months.

------------------
Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.

Yes Al we've had that discussion about why the addresses would be incorrect in the first place. We're looking into the current procedures. Thank you.

The process Dean M describes is a good one. Remember that Regulation B requires record retention and the adverse action notice is one of the records that must be kept. It is probably a good idea to keep a record of the returned status.

The point about suspicious activity is also important to consider. The notice may be returned for legitimate reasons, such as that the customer got a loan somewhere else and moved. But it also may be returned because that wasn't really ever their address. It is certainly worth watching for any patterns.