Compliance Q&A: Counteroffer/Adverse Action Notice

If a member doesn't accept a counteroffer, must a CU send another notice?

October 1, 2014

Q: Does a combined counteroffer/ adverse action notice have to be followed up by another adverse action notice if the member doesn’t accept the counteroffer?

A: No. A credit union that provides a loan applicant with a combined counteroffer and adverse action notice that complies with Regulation B Section 1002.9(a)(2) need not send a second adverse action notice if the applicant does not accept the counteroffer. A model notice (form C-4) is available in Reg B, Appendix C.

Q: Does a credit union have to comply with Regulation B’s adverse action notice requirements when a loan denial is related to a business credit application?

A: Yes, the Equal Credit Opportunity Act and Regulation B apply to all types of credit—commercial as well as consumer. Reg B adverse action notifications for consumer credit applications must be in writing. But a credit union that denies a business loan application has flexibility under Regulation B to provide the notice orally or in writing- Section 1002.9(a)(3).

Q: Does NCUA require federally insured credit unions to display an FBI decal that says “the FBI will investigate all crimes committed against a federally insured financial institution”?

A: No. Displaying the decal is not a regulatory requirement; however, it may serve as a deterrent to some criminals. The credit union may want to consult with law enforcement and its bonding company to determine whether displaying the decal is a good idea.

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