When I am reviewing denied, withdrawn and incomplete loan files for compliance with Regulation B, Regulation C, and Regulation Z, the Uniform Residential Loan Application often is missing the application date. This makes it very difficult to review a loan file for compliance with these regulations. Would it be acceptable to use the Loan Estimate date as the application date in these files?

We believe that it is possible, but very unlikely, that the Loan Estimate date is an appropriate substitute for the application date under Regulation B, Regulation C, or Regulation Z.

Each of the three regulations has its own definition of application, the receipt of which triggers separate, unique obligations. In order to ensure compliance with each regulation’s requirements, it is important to record each regulation’s application date. The various definitions of “application” may align with the Loan Estimate date, but we believe that it is unlikely.

Regulation Z requires lenders to send a Loan Estimate within three business days of receiving a completed application, which Regulation Z defines as the date that the lender receives six enumerated pieces of information from the applicant. It is unlikely that a bank would send the Loan Estimate on the same day that it receives a completed application because not every application will require a Loan Estimate (e.g., applications that are denied or withdrawn within three business days of the application). Consequently, unless your internal policies and procedures require Loan Estimates to be sent the same day completed applications are received, the Loan Estimate date would not be an appropriate substitute for the application date under Regulation Z.

For the same reasons, the Loan Estimate date also is unlikely to align with the application date under Regulation B (which defines a completed application as one in “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”) or Regulation C (which defines an application as “an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested”).

Therefore, we do not recommend relying on the Loan Estimate date as a substitute for the application date under Regulation B, Regulation C, or Regulation Z.

For resources related to our guidance, please see:

Regulation Z, 12 CFR 1026.19(e)(1)(iii)(A) (“The creditor shall deliver or place in the mail the disclosures required under paragraph (e)(1)(i) of this section not later than the third business day after the creditor receives the consumer’s application, as defined in § 1026.2(a)(3).”)

Official Comments, Regulation Z, 12 CFR 1026, Paragraph 19(e)(1)(iii), Comment 3 (“The creditor may determine within the three-business-day period that the application will not or cannot be approved on the terms requested, such as when a consumer’s credit score is lower than the minimum score required for the terms the consumer applied for, or the consumer applies for a type or amount of credit that the creditor does not offer. In that case, or if the consumer withdraws the application within the three-business-day period by, for instance, informing the creditor that he intends to take out a loan from another creditor within the three-business-day period, the creditor need not make the disclosures required under § 1026.19(e)(1)(i).”)

Regulation B, 12 CR 1002.2(f) (“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 (including, but not limited to, credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral))…”)

Regulation C, 12 CFR 1003.2 (“Application means an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested.”)