Regulation B defines the term “adverse action” in §1002.2(c), which states it’s:
(i) A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered;
(ii) A termination of an account or an unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor's accounts; or
(iii) A refusal to increase the amount of credit available to an applicant who has made an application for an increase.
This is important for lenders to understand because taking adverse action triggers certain notification requirements.
Jerod gives some examples of adverse action in the video.
Published 2026/05/12
