When helping a loan officer determine whether the bank must give a written adverse action notice to a business loan applicant, what should the compliance officer consider?
When helping a loan officer determine whether the bank must give a written adverse action notice to a business loan applicant, what should the compliance officer consider?
When determining whether the bank must give a written adverse action notice to a business loan applicant, the compliance officer should consider the gross revenue for the preceding year. According to the regulations set forth by the Equal Credit Opportunity Act (ECOA), businesses with gross revenues of $1 million or less in the previous year are generally considered to require such notices when denied credit. Therefore, the correct factor to consider would be the gross revenue for the preceding year.
The gross revenue for the preceding year is one of the factors that the compliance officer should consider in determining whether the bank must provide a written adverse action notice to a business loan applicant. This is in accordance with the regulations set forth by the Equal Credit Opportunity Act (ECOA).