Adverse Action Notice for Insufficient Collateral?

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Question:

Are you required to send an adverse action notice, when applying Reg B or FCRA, when the Customer is denied due to insufficient collateral? In this situation, the Customer credit report was run and the credit score was not a factor concerning approval.

Answer:

If you turn down the applicant's request, you are required to send an Adverse Action Notice, per Reg B. If the credit report had no impact on the decision, you should not disclose the FCRA information indicating the credit report was used in the decision.

First published on BankersOnline.com 4/9/12