When making a counteroffer to a loan applicant, Regulation B provides two options for providing an adverse action notice. One option is to provide a counteroffer combined with an adverse action within 30 days after receiving a completed loan application. The other option is to provide a counteroffer without including an adverse action notice; after 90 days have passed since notifying the applicant of the counter offer, you would then provide a separate adverse action notice (and if the applicant accepts your counteroffer, no adverse action notice is necessary).

We do not recommend providing a counteroffer that is identified in your loan origination system as “approved but not accepted.” You will not be able to determine whether an applicant has accepted your counteroffer until after 90 days have passed. For HMDA reporting purposes, you would report a counteroffer that is not accepted as a denial.

For resources related to our guidance, please see:

• Regulation B, 12 CFR 1002.9(a)(1) (“A creditor shall notify an applicant of action taken within (i) 30 days after receiving a completed application concerning the creditor’s approval of, counteroffer to, or adverse action on the application . . . . or (iv) 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered.)

• Regulation B, Official Interpretations, 12 CFR 1002, Paragraph 9(a), Comment 6 (“A creditor that gives the applicant a combined counteroffer and adverse action notice that complies with § 1002.9(a)(2) need not send a second adverse action notice if the applicant does not accept the counteroffer. A sample of a combined notice is contained in form C-4 of Appendix C to the regulation.”)

• Regulation B, 12 CFR 1002.2(c) (The term “adverse action” means “a refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered.”)

• Regulation C, Official Interpretations, 12 CFR 1003, Paragraph 4(a)(8), Comment 1 (“If an institution makes a counteroffer to lend on terms different from the applicant's initial request (for example, for a shorter loan maturity or in a different amount) and the applicant does not accept the counteroffer or fails to respond, the institution reports the action taken as a denial on the original terms requested by the applicant.”)