A completed application is received 4 March. Underwriting declines it on 28 March and the file is closed. By what date must the lender notify the applicant of the adverse action?
Correct Answer
C) Notify by 3 April: the notice is due within 30 days of the application
C. April 3 is 30 days after March 4. Use receipt of the completed application as the trigger. March has 31 days: 27 days remain after March 4, followed by three days in April. The March 28 internal decision does not restart the clock. Scope and exceptions: This is the ordinary completed-application rule; do not apply it indiscriminately to incomplete applications or special business-credit procedures. Source: 12 CFR 1002.9(a)(1)(i) — https://www.consumerfinance.gov/rules-policy/regulations/1002/9/
Why This Is the Correct Answer
C. April 3 is 30 days after March 4. Use receipt of the completed application as the trigger. March has 31 days: 27 days remain after March 4, followed by three days in April. The March 28 internal decision does not restart the clock. Scope and exceptions: This is the ordinary completed-application rule; do not apply it indiscriminately to incomplete applications or special business-credit procedures.
Why the Other Options Are Wrong
Option A: No notice is owed once the application has been formally declined
Closing the internal file does not eliminate notification.
Option B: Notify by 28 April, counting the 30 days from the underwriting decision
This incorrectly counts from the underwriting decision.
Option D: Notify by 11 March, since notice is due within 7 days of the file
Seven days is not the applicable notification period.
Exam Tip
Write down the event, interval and resulting date separately.
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