I work on the commercial side of the bank, and I've been trying to determine if a notice of incompleteness can be provided orally to businesses with gross annual revenues > $1MM, and it appears that Reg B doesn't really cover this scenario when it discusses notification to business credit applicants. In the notification to business credit applicants section, it says that we may notify the applicant orally of the action taken, but I'm not sure a true notice of incompleteness would fall into this category, so I'm thinking that all incomplete notices must be in writing regardless of business size. Does anyone have any experience with this? Do notices of incompleteness always need to be written? Thank you in advance!

You can make your notice of incompleteness oral by phone. Just memorialize the call in the application record.

It does not stop your 30-day clock though.

Thank you both for the responses! When you say it doesn't stop the 30-day clock, does that mean that we really can only notify the borrower of documents needed orally, but if we want to do the combined notice & adverse action (which would give them so many days to return the information, after which their application would be closed) we should provide that in writing, regardless of business revenues?

I'll tell you that I tried to run this down a few years ago. I reached out to several compliance vendors, the ABA, and others, and the general consensus was that you could provide orally and stop the 30 day clock for incomplete applications in 1002.9(c). Once you had a complete application, the 30 day clock would kick in. I could not find any support for this in the Reg or commentary and wasn't provided any, but everyone in commercial lending was pretty sure it was true.

My 2 cents are that regardless of business or consumer, an applicant that provides an application that meets the definition of an application under Reg B, but is not a completed application due to items in the applicants control needs a written NOI within 30 days if they still haven't provided the items and the app hasn't been otherwise dispositioned by that time. I could find almost nobody that agreed with me, at least within earshot of a commercial lender.

Well, you are definitely within your rights to provide an oral notification under 1002.9(a) regarding the notice of adverse action.

However, the notice of incompleteness is governed under 1002.9(c) and the word "oral" is not found outside of below and only the word "written" is found in paragraph (c)(1), so although you are allowed to provide them an oral notice, it does not stop the 30-day clock, like a written NOI would do.

Seems pretty clear to me.

(c)(3) Oral request for information. At its option, a creditor may inform the applicant orally of the need for additional information. If the application remains incomplete the creditor shall send a notice in accordance with paragraph (c)(1) of this section.

Thank you! That was my interpretation as well. I appreciate all of the feedback!