We believe you must send an adverse action notice to the original applicant, and if the denial was based in part on information in the co-applicant’s consumer report, to the co-applicant as well.

The Equal Credit Opportunity Act (ECOA) and Regulation B adverse action requirements apply to the “applicant” for credit. When there are multiple applicants, the ECOA and Regulation B require that an adverse action notice be provided only to “the primary applicant where one is readily apparent.” Consequently, if the original applicant was readily apparent as the primary applicant for the second credit application, only the so-called original applicant is entitled to a Regulation B adverse action notice.

However, the Fair Credit Reporting Act (FCRA) adverse action notice requirements apply to any “consumer” who is subject to the adverse action, not just to a primary applicant. Consequently, each co-applicant whose consumer credit report provided at least a partial basis for the underwriting decision is entitled to an FCRA adverse action notice. As explained in a Federal Trade Commission (FTC) opinion, if your credit denial was based at least in part on the co-applicant’s consumer report, the co-applicant must receive a separate FCRA adverse action notice.

For resources related to our guidance, please see:

• Regulation B, 12 CFR 1002.2(e) (“Applicant means any person who requests or who has received an extension of credit from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit. For purposes of § 1002.7(d), the term includes guarantors, sureties, endorsers, and similar parties.”)

• Regulation B, 12 CFR 1002.9(f) (“Multiple applicants. When an application involves more than one applicant, notification need only be given to one of them but must be given to the primary applicant where one is readily apparent.”)

• FCRA, 15 USC 1681m(a) (“If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall (1) provide oral, written, or electronic notice of the adverse action to the consumer; . . .”)

• FTC Advisory Opinion to Stinneford (July 14, 2000) (“When there are two applicants a creditor cannot send a combined ECOA/FCRA adverse action notification to only the primary applicant if the application is denied, even in part, based on information in a co-applicant’s consumer report. In that circumstance, the co-applicant has been the subject of ‘adverse action’ and must be provided his or her own separate notification to satisfy the requirement of Section 615(a) of the FCRA. If the creditor has provided the ECOA-required information specified in Section 202.9(a)(2) of Regulation B to the primary applicant, it need not be included in the FCRA notice provided to the co-applicant.”)