Nevertheless, the creditor must act with reasonable diligence to collect information needed to complete the application.
For example, the creditor should request information from third parties, such as a credit report, promptly after receiving the application.
For example, denial at point of sale is not adverse action in the following situations: i. 2(f) The term "procedures" refers to the actual practices followed by a creditor for making credit decisions as well as its stated application procedures.
A credit cardholder presents an expired card or a card that has been reported to the card issuer as lost or stolen. The amount of a transaction exceeds a cash advance or credit limit. The circumstances (such as excessive use of a credit card in a short period of time) suggest that fraud is involved. For example, if a creditor's stated policy is to require all applications to be in writing on the creditor's application form, but the creditor also makes credit decisions based on oral requests, the creditor's procedures are to accept both oral and written applications. A creditor is encouraged to provide consumers with information about loan terms.
A consumer calls to ask about loan terms and an employee explains the creditor's basic loan terms, such as interest rates, loan-to-value ratio, and debt-to-income ratio. A consumer calls to ask about interest rates for car loans, and, in order to quote the appropriate rate, the loan officer asks for the make and sales price of the car and the amount of the downpayment, then gives the consumer the rate. A consumer asks about terms for a loan to purchase a home and tells the loan officer her income and intended downpayment, but the loan officer only explains the creditor's loan-to-value ratio policy and other basic lending policies, without telling the consumer whether she qualifies for the loan. A consumer calls to ask about terms for a loan to purchase vacant land and states his income and the sales price of the property to be financed, and asks whether he qualifies for a loan; the employee responds by describing the general lending policies, explaining that he would need to look at all of the consumer's qualifications before making a decision, and offering to send an application form to the consumer. An application for credit includes the following situations: i.
Whether the inquiry or prequalification request becomes an application depends on how the creditor responds to the consumer, not on what the consumer says or asks.2(j) Regulation B covers a wider range of credit transactions than Regulation Z (Truth in Lending).Under Regulation B, a transaction is credit if there is a right to defer payment of a debt-regardless of whether the credit is for personal or commercial purposes, the number of installments required for repayment, or whether the transaction is subject to a finance charge.If additional information is needed from the applicant, such as an address or a telephone number to verify employment, the creditor should contact the applicant promptly.(But see comment 9(a)(1)-3, which discusses the creditor's option to deny an application on the basis of incompleteness.) 2(g) The test for deciding whether a transaction qualifies as business credit is one of primary purpose.Credit systems that do not meet these criteria are judgmental systems and may consider age only for the purpose of determining a "pertinent element of creditworthiness." (Both types of systems may favor an elderly applicant. The regulation does not specify how often credit scoring systems must be revalidated.