If we accidentally deny a loan that has already been withdrawn by the borrower, prior to our credit decision, how should we handle the reporting of the HMDA data on the LAR? Should we report it as withdrawn per Reg C regardless of the existance of the denial letter, or should we report it as denied because there was a credit decision and letter issued and that's the action taken by the bank?
Denying a Joint Application
If we send a written joint counteroffer/Adverse Action Notice (counteroffer + Adverse Action language), per § 1002.9(a)(1)(iv), if the borrower responds AFTER the 90-day time frame, could we still honor their acceptance or should we require a new application? (Note that no additional denial is necessary due to the Adverse Action language contained in the counteroffer.)
I'm looking for some clarification on the Notice of Action Taken provided to businesses with revenues in excess of $1MM.
Can a Bank choose to provide these businesses with an Adverse Action Notice which lists the reasons for denial, or is the Bank required to provide the Notice of Action Taken which does not list the reasons for denial? I wasn't sure if there were any reasons that would prevent us from providing an Adverse Action Notice as opposed to a Notice of Action Taken.
Also, the provision does give the Bank the flexibility to notify the applicant, orally or in writing. If the applicant is notified orally, what would be the best course of action that the Bank or Loan Officer would need to take for compliance monitoring purposes?
"(ii) With regard to a business that had gross revenues in excess of $1 million in its preceding fiscal year or an extension of trade credit, credit incident to a factoring agreement, or other similar types of business credit, a creditor shall:
(A) Notify the applicant, within a reasonable time, orally or in writing, of the action taken; an
(B) Provide a written statement of the reasons for adverse action and theECOA notice specified in paragraph (b)(1) of this section if the applicant makes a written request for the reasons within 60 days of the creditor's notification."
We have a business entity request for commercial credit and a credit report was pulled on the two owners, with the credit request denied based on one owner's credit score.
If the FCRA portion of the Adverse Action Notice is completed is that wrong?
If this is included and the score, key factors etc. are for the credit score used in making the credit decision is sent to both owners, in the name of the business entity, is that wrong?
I saw a post on the BOL website from 2018 by David Dickinson titled "Applicant Re-Apply w/Co-Borrower: Counteroffer?" It was unclear to me whether the lender's requirement to add a co-borrower constitutes an "other term" as part of a "counteroffer" or whether the requirement to add a co-borrower requires the denial and written adverse action of the borrower and a new application by the borrower and co-borrower (i.e. is requiring a co borrower really a counter offer). I would appreciate any clarification on the issue.
When there is conditional approval to an applicant for a HELOC based on stated income, but the applicant hasn't provided any of the requested documents to substantiate the income, is this a denial because we are unable to verify income or approved not accept by the borrower?
What can we put down as the reason for denial on the Adverse Action Notice, for loans denied due to criminal subpoenas? Can we select "Other" and specify "BSA concerns"?
It is my understanding that we have 30 days to notify the customer of our loan decision when denying the request. My question is, does the letter date have to reflect the same date of denial? I had a loan officer deny a mortgage loan within three days of application to avoid early disclosure requirements, but then the application was re-activated and the lender made a second decision with a later date. This second decision date makes the denial notice reflect more than three days from the application date.
What if you do not have a complete address to send an adverse action to?