Requirements On An Adverse Action Notice
The Fair Credit Reporting Act (FCRA) under Section 615(a) states the requirements for an Adverse Action Notice. The Adverse Action Notice shall incorporate the following disclosures:
- Notice that the Adverse Action was taken based on the report from a consumer reporting agency
- The applicant’s or borrower’s right to:
1. Get a copy of the consumer report for free from the consumer reporting agency, if requested, within 60 days.
2. Dispute the correctness or completeness of any information in the consumer report by the consumer reporting agency. - The name, address, and contact details of the consumer reporting agency that provided the report to the applicant or borrower.
- A declaration that the consumer reporting agency did not make the credit decision and is not able to provide the specific reasons for the Adverse Action.
- Credit score disclosures if the credit score became a factor in the Adverse Action.
Regulation B of the Equal Credit Opportunity Act (ECOA) includes content and format requirements for an Adverse Action Notice. The Adverse Action Notice shall include the following disclosures:
- The creditor’s name and address
- The applicant’s or borrower’s right to:
- An ECOA anti-discrimination notice that prohibits creditors from denying credit applications based on race, color, religion, national origin, sex, marital status, and age.
- The name and address of the creditor’s primary regulator
- A statement of the action taken by the creditor
- A declaration of the specific reasons for the action taken or a disclosure of the applicant's or borrower's right to a statement of specific reasons, including the name, address, and contact details of the source of information.
Regulation B of the Equal Credit Opportunity Act (ECOA) states what is required on an Adverse Action Notice. The Adverse Action Notice must be served by the creditor to the applicant or borrower within:
- thirty days after receiving a complete credit application.
- thirty days after receiving an incomplete credit application.
- thirty days after taking action on an existing credit account.
- ninety days after making a counteroffer to an application for credit if the applicant does not accept the counteroffer.
The Adverse Action Notice under the Regulation B of the Equal Credit Opportunity Act (ECOA) is not required if:
- The transaction does not involve credit.
- A credit applicant or borrower accepts a counteroffer.
- A credit applicant or borrower expressly withdraws an application.
- The creditor approves a credit application, and the two parties expect a status inquiry from the applicant within 30 days, but it does not happen, so the application is withdrawn.
