Answer:
You need not send a written notice, but that is a preferred method since it may allow you to close a good loan that you have already invested your time and money in.
Section 202.9(e) When an applicant submits an application and the parties contemplate that the applicant will inquire about its status, if the creditor approves the application and the applicant has not inquired within 30 days after applying, the creditor may treat the application as withdrawn and need not comply with paragraph (a)(1) of this section.
The OSC allows an oral notification under Section 202.9.
Notification occurs when a creditor delivers or mails a notice to the applicant's last known address or, in the case of an oral notification, when the creditor communicates the credit decision to the applicant.
I wouldn't send an Adverse Action Notice as that looks derogatory to someone you approved. I recommend creating a template letter telling them what they were approved for and when that offer expires.
I would write across the face of that loan package "WD" for withdrawn and date it. I would then retain it as though it was a denied loan so you have an audit trail and evidence of why you accessed the credit report.
First published on BankersOnline.com 4/19/04
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