Under Regulation B, when an applicant withdraws an application, there is no requirement to send the applicant a notification. That said, some institutions still choose to do so. If you are a HMDA reporting institution, Regulation C requires you to report the action taken date. So, in the case of a withdrawal, whether you send a notification or not, you need a way to document the date the application was withdrawn. If you don’t send a notification of withdrawal, it might be as simple as the lender making a file comment. If you do send a notification, the action taken date is typically the date on the notification. Similarly, Regulation B doesn’t address applications that are “approved but not accepted”, but Regulation C does. So, again, if you are a HMDA-reporting institution, you need a way to document the action taken date. At the end of the day, you just want to ensure that the action taken date reported on your HMDA LAR can be supported within your file documentation.
David explains more in the video.