Academic journal article ABA Banking Journal

When Does Regulation B Clock Start Ticking?

Academic journal article ABA Banking Journal

When Does Regulation B Clock Start Ticking?

Article excerpt

Q. We are trying to devise a more-defined procedure for when an application is complete to begin our 30-day clock under Regulation B. We have seen conflicting information regarding whether we can require employment and income verifications to be received before we call an application "complete." Can you provide some guidance?

A. Under Regulation B, "application" means "an oral or written request for an extension of credit that is made in accordance with procedures established by a creditor for the type of credit requested ..." A "completed application" means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested.

Reg B states, however, that this pertains only to information the borrower can provide, so that is when you have a "completed application." If you are asking for pay stubs, for example, that is something the borrower can provide, so you can, as a matter of bank policy, consider the application incomplete without this information.

However, if by "verifications" you mean contacting the employer and receiving some kind of third-party verification, that is not something the borrower can provide, so that could not be a criteria for considering an application as "complete. …

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