Answer:
The only federal regulation in play is the Fair Credit Reporting Act. It applies if you use a credit report (essentially third-party information) in your decision to deny a product or service.
The loan-type adverse action isn't necessary, but is often used because it allows for an explanation, if you can clearly define it and are not misleading, and mostly because it has the FCRA notice.
First published on BankersOnline.com 3/7/05