If we do not identify the date on which a loan application is “completed” under Regulation B, what date should we use as the application date on an adverse action notice? Would it be acceptable to use the application date under either HMDA or the TRID rule?

We believe that either the HMDA or the TRID application date may serve as an acceptable substitute for the purpose of sending adverse action notices under Regulation B, depending on what your internal policies require for an application to be considered “complete.”

Regulation B requires you to send out adverse action notices within 30 days after receiving a “completed application,” which is defined as an application 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.”

As you have indicated, HMDA’s Regulation C and the TILA-RESPA Integrated Disclosure (TRID) rule also have their own definitions of “application,” which are different from Regulation B’s definition. In proposing the TRID rules, the CFPB acknowledged these varying definitions but declined to align them, citing the distinct purpose of each rule. Consequently, if your institution does not record the date on which an application is considered complete under Regulation B, neither Regulation C nor TRID provide a perfect substitute application date for the purpose of sending adverse action notices under Regulation B.

However, in our view, either the HMDA application date or the TRID application date may be acceptable, depending on your internal policies. For example, under TRID, an application is complete once the bank receives six specific pieces of information: (1) the consumer’s name, (2) the consumer’s income, (3) the consumer’s social security number to obtain a credit report, (4) the property address, (5) an estimate of the value of the property, and (6) the mortgage loan amount sought. If this aligns with your internal policy regarding when an application is considered complete under Regulation B, then the TRID application date should be acceptable for your Regulation B adverse action notices.

Similarly, HMDA 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.” Consequently, depending on your procedures, the date on which an application is considered submitted under HMDA also may align with the date an application is considered complete under Regulation B.

For resources related to our guidance, please see:

Regulation B, 12 CR 1002.9(a)(1) (“A creditor shall notify an applicant of action taken within: 30 days after receiving a completed application concerning the creditor's approval of, counteroffer to, or adverse action on the application…”)

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.”)

Regulation C, 12 CFR 1003.2(Application), Comment 2 (“Bureau interpretations that appear in the official staff commentary to Regulation B (Equal Credit Opportunity, 12 CFR part 1002, Supplement I) are generally applicable to the definition of an application under Regulation C. However, under Regulation C the definition of an application does not include prequalification requests.”)

Regulation Z, 12 CFR 1026.2(a)(3)(i) (“Application means the submission of a consumer’s financial information for the purposes of obtaining an extension of credit.”)

Regulation Z, 12 CFR 1026.2(a)(3)(ii) (“For transactions subject to § 1026.19(e), (f), or (g) of this part, an application consists of the submission of the consumer’s name, the consumer’s income, the consumer’s social security number to obtain a credit report, the property address, an estimate of the value of the property, and the mortgage loan amount sought.”)

TRID Final Rule, 78 FR 79730, 79767 (December 31, 2013) (“The Bureau recognizes the potential benefits of a single definition of application . . . The definition of application in this final rule serves a different purpose than the definition of application in Regulations B and C. ‘Application’ as defined by this final rule triggers a creditor’s obligation to provide disclosures to aid consumers in shopping for and understanding the cost of credit and settlement. On the other hand, a creditor’s receipt of an application under Regulation B triggers a creditor’s duty to make a credit decision and notify the borrower within a specified time frame. Under Regulation C, receipt of an application triggers a duty to collect and report information on the disposition of that application and on other aspects of the transaction as well as the applicant’s characteristics. Accordingly, the Bureau is not expanding the definition of application adopted in this final rule to regulations that implement ECOA, FCRA, and HMDA, or vice versa.”)