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.These persons must comply with § 1002.4(a), the general rule prohibiting discrimination, and with § 1002.4(b), the general rule against discouraging applications.
Each comment in the commentary is identified by a number and the regulatory section or paragraph that it interprets. If a transaction provides for the deferral of the payment of a debt, it is credit covered by Regulation B even though it may not be a credit transaction covered by Regulation Z (Truth in Lending) (12 CFR Part 1026).
The written commitment may not be subject to conditions other than conditions that require the identification of adequate collateral, conditions that require no material change in the applicant's financial condition or creditworthiness prior to funding the loan, and limited conditions that are not related to the financial condition or creditworthiness of the applicant that the lender ordinarily attaches to a traditional application (such as certification of a clear termite inspection for a home purchase loan, or a maximum mileage requirement for a used car loan).
But if the creditor's program does not provide for giving written commitments, requests for preapprovals are treated as prequalification requests for purposes of the regulation. Under the same facts as above, the financial institution evaluates the person's creditworthiness and determines that she does not qualify for a preapproval. The regulation defines a completed application in terms that give a creditor the latitude to establish its own information requirements.
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.
A person asks a financial institution to "preapprove" her for a loan (for example, to finance a house or a vehicle she plans to buy) and the institution reviews the request under a program in which the institution, after a comprehensive analysis of her creditworthiness, issues a written commitment valid for a designated period of time to extend a loan up to a specified amount.
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.