Unpacking Adverse Action Requirements

Accurate communication with applicants and existing borrowers is critical, especially when the application is being denied or the loan terms are changing for a pre-existing credit arrangement. Adverse action notices are designed to communicate concern to applicants and borrowers. Along with being an informational notice, a loan denial triggers Regulation B requirements, and depending on the reason for denial, a Fair Credit Reporting Act (FCRA) notice may also be mandated. Examiners have long identified weaknesses in the handling of loan applications that never yield an originated loan. This webinar will focus on pinpointing when an inquiry becomes an application, important timing requirements, and proper completion of the adverse action notice and other notification options, including a counteroffer.

This program will also review the CFPB’s advisory opinion and address the notification requirements when there are unfavorable changes to the terms of existing credit arrangements. You will learn about the notification requirements to both consumer and business applicants. Common regulator-identified errors will be explained and tips on how to avoid them will be provided. To help meet fair lending and Reg B compliance standards, participants will receive a tool designed to document the second review of a denied loan file.