Answer:
Answer by Andy Zavoina:
For the purposes of Reg. B (which ties to your adverse action) you determine what an application is. If you have enough information to make a credit decision, you generally have your application.
Section 202.2 Definitions.
A completed application means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested (including, but not limited to, credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral). The creditor shall exercise reasonable diligence in obtaining such information.
Answer:
Answer by Lucy Griffin:
Many examiners have become fond of using the credit report date to prove that an application existed. This is not actually correct under Regulation B. The examiners "reason" that you can't pull the credit report without a legitimate business purpose. This is true, but under FCRA, a legitimate business purpose can exist without there being an application for purposes of Regulation B.
You should have a written procedure that gives guidance on when there is actually an application. In the situations you describe, the application probably exists when the customer actually ask for, rather than about, credit. This may vary from situation to situation.
First published on BankersOnline.com 2/24/03
print
share