Skip to content

Send Adverse Action Letter to Guarantors?

Answered by: 

Question: 
I have a borrower who applied for a commercial loan which her parents guaranteed along with her, due to her income being insufficient. The loan was declined. Do I have to send an adverse action letter to each of the parents as well, since they were guaranteeing the loan, or just to the borrower?
Answer: 

Reg. B requires only that the primary applicant be notified of the action taken. (202.9(f)) You may provide a denial letter to all involved; however, FCRA requires that any applicant whose credit report was used either partially or in whole to take an adverse action on a credit request, must be provided the FCRA notice. If the guarantor's credit report had been a negative factor in the denial, the guarantor would need to receive that notice.

First published on BankersOnline.com 3/01/10

First published on 03/01/2010

Filed under: 
Filed under compliance as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics