Question: Is there a list of specific reasons that we are required to use when disclosing those reasons on an adverse action notice under Regulation B?
Answer: No, not a specific list. Your reasoning for denying credit or taking adverse action will differ from situation to situation, so no one list of reasons exists. However, you do have to disclose the principal reasons for denying an application or taking other adverse action.
Some of the most common reasons include: incomplete credit application, income insufficient for credit requested, excessive obligations in relation to income, inability to verify income, poor credit performance with the credit union, delinquency with past or present credit obligations other than with the credit union, or legal judgments (such as garnishment, attachment, or foreclosure).
This list is by no means exhaustive, but you must give the specific reasons so that the member has the opportunity to improve their standing for future applications.
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