Withdrawn Application Require Notification?

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Question:

If a customer withdraws an application, do we have to send any notification to them? One loan officer thinks that we need to send an adverse action notice but I do not think we should since we are not denying or counter offering the loan. Can we charge the customer any fees we have incurred? The application was received on July 14th, the GFE was sent to the customer on 7-18-11, the customer withdrew the application by telephone on 7-22-11. Cost we incurred are: Lien Search (ordered 7-18-11) Flood Search (ordered 7-18-11) Credit Report (used from a previous loan within the 6 month period and WAS NOT CHARGED at that time).

Answer:

The ECOA (Reg B) and FCRA adverse action notices are only required when adverse action has been taken.

Application received on 7/18. Disclosures mailed on 7/18 and allowing for the 3 business day presumption of receipt required by the regulation they did not receive the disclosures until 7/21. You incurred the expenses on 7/18 before the disclosures were delivered and/or the applicant's intent to proceed. You get to pay for the expenses incurred. You can only collect the credit report fee if you have a signed processing agreement where the applicant agreed to pay the fee, but with the low cost of a credit report is it really worth your time to pursue its collection?

First published on BankersOnline.com 8/15/11