Adverse Action & Commercial Applicants

When it comes to adverse action notices, remember that two different regulatory requirements can often come into play, the Equal Credit Opportunity Act (Regulation B) and the Fair Credit Reporting Act (FCRA). While Regulation B extends to all types of credit, the FCRA’s focus is really focused on the use of consumer reports. While Regulation B has some potential relief built in for business credit applicants (depending on business size and method of application), there’s often a misconception that an institution gets an “out’ all together from providing an adverse action notice when an application is primarily for business or commercial purposes.

The FCRA has its own adverse action notification requirements, triggered when adverse action is taken on a “consumer” that is based in any way on a consumer report. When a credit score is involved, that must also be disclosed as well.

Jerod explains more in the video.

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Jerod Moyer

Jerod is the leader of Banker’s Compliance Consulting’s training productions. He is a nationally recognized speaker. Whether it’s a conference, seminar, school, webinar or luncheon, it’s easy to stay engaged when he presents due to the amount of passion and energy he brings to each and every compliance topic. Jerod has spoken on behalf of the American Bankers’ Association, BankersOnline, many state banking associations, private compliance groups and financial institutions. He is a Certified Regulatory Compliance Manager (CRCM) and BankersOnline Guru. Jerod likes to spend his time (between reading regulations and producing compliance training!) relaxing at the lake with his wife and three children, following their activities or engaged in something sports-related!

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Adverse Action & Commercial Applicants