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Adverse Action Notices & Counter Offers

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Question: 
If you make a counter offer that is never accepted do you then have to follow the counter offer up with an adverse action notice at some point in time?
Answer: 

Yes. Section 202.9(a)(1)(iv) states:

A creditor must notify an applicant of action taken (denial) within 90 days after notifying the applicant of a counter offer if the applicant does not expressly accept or use the credit offered.The commentary to this section indicates this section "does not require a creditor to hold a counter offer open for 90 days or any other particular length of time."

Look at the Commentary to Section 202.9(a)(1) #6, which states "However, a creditor that gives the applicant a combined counter offer and adverse action notice . . . need not send a second adverse action notice if the applicant does not accept the counter offer."


I suggest that you provide a combined counter offer and denial so that you don't have to send a denial later if they don't accept the counter offer. This provides one piece of paper for your action instead of a possible two.

First published on BankersOnline.com 1/20/03

First published on 01/20/2003

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