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AAN If Not Enough Credit for Balance Transfer?

Answered by: 
Randy Carey

Question: 
Is an Adverse Action Notice required if a consumer requests a Balance Transfer but does not have enough available credit to complete the transaction? What if there is enough available credit but is denied based on other factors, i.e., credit score, payment history, etc.?
Answer: 

A denial of a transfer that exceeds current credit limits is not an adverse action. If you deny a transfer if the credit limit was not exceeded due to credit information, then it would be an adverse action. Consideration of a potential breach of contract by the bank for failure to honor the contracted credit limit might also be considered.

First published on BankersOnline.com 6/10/13

First published on 06/10/2013

Filed under: 
Compliance
Filed under compliance as: 
Adverse Action
IT

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