United States
Hong KongAdverse action notices
A creditor must notify an applicant of action taken within 30 days of a completed application, stating the specific reasons for a denial or how to obtain them. Where a credit report was used, FCRA adds its own disclosure requirements.
A denial is not just a decision. It is an event with a regulatory response attached.
What counts as adverse action
A refusal to grant credit in substantially the amount or on substantially the terms requested. Also a termination of an account, or an unfavourable change to terms.
A counteroffer the applicant accepts is not adverse action. A counteroffer they decline can be.
The ECOA requirement
Notice within 30 days of receiving a completed application, under 12 CFR 1002.9(a)(1).
The notice must state the specific principal reasons for the decision, or tell the applicant how to obtain them within 60 days.
"You did not meet our lending criteria" is not a reason. The requirement is specific: insufficient income, excessive obligations, unacceptable property, insufficient credit history. A generic sentence fails the rule.
The FCRA overlay
Where a credit report contributed to the decision, the Fair Credit Reporting Act requires its own disclosures: the credit score used, the range, the key factors that affected it, and the agency that supplied the report.
The applicant must also be told they may obtain a free copy of the report and dispute inaccuracies.
Two statutes, one notice
In practice the requirements are combined into a single document, which is why candidates often think they are one rule.
They are not. ECOA is about the credit decision and the reasons for it. FCRA is about the report that informed it. A question can ask about either.
Incomplete applications
Where an application is incomplete, a creditor may send a notice of incompleteness instead, specifying what is missing and giving a reasonable time to supply it.
That is not adverse action, and the 30-day clock for adverse action runs from completion rather than from first contact.
Common questions
How long does a creditor have to send an adverse action notice?
30 days from receiving a completed application.
What must an adverse action notice contain?
The specific principal reasons for the decision, or how to obtain them within 60 days. Where a credit report was used, FCRA disclosures are added.
Is a counteroffer adverse action?
Not if the applicant accepts it. A declined counteroffer can be.
Are ECOA and FCRA notices the same?
They are usually combined into one document but they are separate requirements from separate statutes.
What if an application is incomplete?
A notice of incompleteness may be sent instead, specifying what is missing and allowing a reasonable time to supply it.