Question & Answer

Question: My bank's indirect lending department wants to draft a "friendly" adverse action letter. They also want to preprint the ECOA notice on the back side of the stationary. I know that the Regulation doesn't require a specific format, but how creative can we be?

Answer: Although the term "adverse action" sounds formidable, Regulation B actually allows you to be flexible and friendly. It is legal to draft a letter that sounds as though you genuinely regret the denial and would like the applicant's business in the future. The only requirement is that the notice include the information required by Section 202.9. Along with the flexibility to sound friendly, you can arrange the information any way you like. Preprinting the ECOAnotice on the back is OK. Just don't let anyone forget that it is a required part of the notice.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 12, 7/96