[mdunker]

We are having our HMDA review done and during this review the auditor is stating that we should be using the sample notice for our incomplete C6. We have been using the standard adverse action form and putting in what we need from the customer, and marking the box credit application incomplete. what they are stating is that by doing our incompletes this way that an examiner may not like that we have marked the LAR as a 5 incomplete application and make us put them as denied. I wanted to get another opinion.

NOTICE OF ACTION TAKEN

02/01/2017

Description of Account, Transaction, or Requested Credit:
Application for Credit requested by you.

Description of Action Taken:
We regret we are unable to approve your application.

Principal Reasons For Adverse Action Taken.

0Credit application incomplete
0Temporary or irregular employment
0Unable to verify employment
0Length of employment
0Income insufficient for amount of credit requested
0Excessive obligations in relation to income
0Unable to verify income
0Length of residence
0Temporary residence
0Unable to verify residence
0No credit file
0Limited credit experience
0Poor credit performance with us
0Delinquent past or present credit obligations with others
0Collection action or judgment
0Garnishment or attachment
0Foreclosure or repossession
0Bankruptcy
0Number of recent inquiries on credit bureau report
0Value or type of collateral not sufficient
0Other, specify:

Disclosure of Use of Information Obtained From an Outside Source

This section should be completed if the credit decision was based in whole or in part on information that has been obtained from an outside source.

0Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency.

TransUnion
2 Baldwin Place, P.O. Box 1000
Chester, PA 19022
800-888-4213
http://www.transunion.com/myoptions

Equifax
PO Box 740241
Atlanta, GA 30374-0241
800-685-1111
http://www.equifax.com

Experian
701 Experian Parkway
Allen, TX 75013
888-397-3742
http://www.experian.com

We also obtained your credit score from this consumer reporting agency and used it in making our credit decision. Your credit score is a number that reflects the information in your credit report. Your credit score can change, depending on how the information in your credit report changes.
Your Equifax credit score:
SCORE DATE:
Equifax scores range from a low of 334 to a high of 818.
Key factors that adversely affected your credit score:

0Our credit decision was based in whole or in part on information obtained from an affiliate or from an outside source other than a consumer reporting agency. Under the Fair Credit Reporting Act, you have the right to make a written request, no later than 60 days after you receive this notice, for disclosure of the nature of this information.

Lender’s Contact.
If you have any questions regarding this notice, you should contact:
Lending Officer’s Name:
Lender’s Name: Farmers State Bank
Address: 220 S Detroit Street, Lagrange, IN 46761
Phone:

Notice: The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is FDIC CONSUMER RESPONSE CENTER 1100 WALNUT STREET, BOX #11, KANSAS CITY, MISSOURI 64106.

[kowsley]

Under Regulation B, 1002.9(c) states:
Within 30 days after receiving an application that is incomplete regarding matters that an applicant can complete, the creditor shall notify the applicant either:
(i) Of action taken, in accordance with paragraph (a) of this section; or
(ii) Of the incompleteness, in accordance with paragraph (c)(2) of this section.

Based on your statement, you are taking one of the prescribed paths dictated by the regulation, i.e. action taken. You are marking the adverse action as application incomplete and requesting what is needed.

There is a statement in the commentary 1002.9(a)(1)-3 that states:
3. Incomplete application—denial for incompleteness. When an application is incomplete regarding information that the applicant can provide and the creditor lacks sufficient data for a credit decision, the creditor may deny the application giving as the reason for denial that the application is incomplete. The creditor has the option, alternatively, of providing a notice of incompleteness under §1002.9(c).

That being said, if you are denying the transaction due to incompleteness then sending the adverse action is the appropriate action to take and the transaction would be reported as a denial on the LAR.

If the lender is seeking to receive the information from the borrower to try and complete the application, then you would want to utilize model form C-6 in the regulation. If utilizing this model form, the customer has the ability to complete the application and the lender can make the appropriate credit decision. Utilizing this method would be reported on the LAR as incomplete. If the borrower doesn’t respond to the notice of incompleteness the lender does not have to send the adverse action notice as the language in the model notice is sufficient.

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