Case-by-Case Decisions

During this pandemic, credit administration has communicated that adjustments to loan payments/terms for existing customers will be made "case-by-case", rather than create a skip payment program or something similar. Should I have fair lending concerns with this approach?

I am sure that you would want to have some guidelines - but leaving it open to lender discretion - well, you know what road that leads down.

Mel, Rules of engagement:

Rule 1 - Randy is right.
Rule 2 - in the unlikely event Randy may be wrong, reread Rule 1!

Another related question about case-by-case situations in regards to Reg B and adverse action.

Lenders are constantly having discussions with borrowers to determine their options. For example, a commercial borrower came in and asked for a modification to pay interest only. However, the lender knows they have a large amount of funds on deposit and suggested the borrower use that if times get tough, basically saying no to their original request. I don't think this would be considered a "denial", but rather giving advice.

Does the lender need to obtain financials, pull credit, etc. and underwrite the credit in order for adverse action to be required?

a commercial borrower came in and asked for a modification to pay interest only

The loan officer told him no - did he not.

I'm leaning towards that being an inquiry rather than a complete application. Why don't you agree?

I am only going by what you originally wrote: a commercial borrower came in and asked for a modification

How is that an inquiry?

Now if he came and said - you know - what do you think are some of my options - that would be an inquiry.,

Reg B doesn't care whether you obtained information from a third party. We may not need an adverse action for FCRA, but I agree with Randy, it sounds like your lender made a credit decision,

As for matching the accommodation to the borrower's needs -- while that might be difficult when the hordes are beating on your doors for relief, but isn't that a basic rule of lending -- to address the customer's needs? At least select the best option for the borrower from your menu of choices.

Sometimes, though, the menu may not be more than "I got burgers and hot dogs, Whaddya want?"