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Send Adverse Action Letter to Guarantors?

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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?

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 3/01/10

First published on 03/01/2010

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