skip to Main Content
KPA Logo

When Should You Provide an Adverse Action Notice? (Infographic)

Toby Graham /

If you’re an organization that processes credit applications, it is your duty to provide an Adverse Action Notice if a consumer is denied credit. And you’ve got to provide it within 30 days of receiving a credit application. There are two key laws here (both federal) that govern the requirements around adverse action notices  — the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA). They’re in place to make sure consumers applying for credit are given the reasons a creditor took adverse action on the application (or on an existing credit account).

Adverse action means:

  • Denying credit to an applicant
  • Refusing to grant credit in substantially the amount or on substantially the terms requested by the applicant, unless the applicant accepts your counteroffer;
  • Any action taken or determination that is adverse to the interests of the consumer (for example, unwinding a spot delivery)

So, when should you provide an Adverse Action Notification?

This handy flow chart can help you figure it out…

F&I Software & Services Designed for Dealerships

Vera F&I software and services are specifically designed for vehicle dealers including automotive, truck, RV, marine, and power sports. Our F&I compliance solutions will help you develop compliant sales processes, train sales and finance teams, safeguard consumer information, and maintain clean deal jackets—all to help you minimize risk and maximize profits.

Back To Top Services: Compliance Services Services: Workplace Health and Safety Services Services: Environmental Risk Management Services About: Leadership Software: Online Training About: Who We Are Resources: Library Resources: Events and Webinars Resources: Blog YouTube Twitter LinkedIn