Substantively, Cx15858 is a duplicate of Sample Form C-1 provided under Federal Regulation B (12 CFR Pt. 1002, App. C), which is used to comply with certain disclosure requirements under both the Equal Credit Opportunity Act (15 USCA §§ 1691 et seq.) and the Fair Credit Reporting Act (Ibid. § 1681m[a] & [b]). Under administrative law, it is used to comply with 12 CFR § 1002.9(a)(1) & (2)(i) (Regulation B).
While Form C-1 is used for these requirements, Regulation B promulgates other sample forms which may be used for the same or other requirements (see 12 CFR Pt. 1002, App. C for details). Due to demand, we will be incorporating Sample Forms C-4 (“Notice of Action Taken, Statement of Reasons and Counteroffer”) and C-6 (“Notice of Incomplete Application and Request for Additional Information”) into Cx15858, along with an original “Confirmation of Withdrawal of Loan Application” form.
Notice of Action Taken, Statement of Reasons and Counteroffer (Form C-4)
Form C-4 will appear in Cx15858 when “Lender Loan Status” (Field 52370) equals “UW Counter Offer.” Unlike Form C-1, Form C-4 in Regulation B does not provide more than introductory paragraphs to each element of the disclosures (e.g., while Form C-1 provides a checklist for reasons why a loan was denied, Form C-4 only states that the loan was denied and leaves it to the lender to fill in the details).
To help make Form C-4 more universal, we have incorporated several elements of Form C-1 into it. For example, it will include the paragraph “We are unable to offer you credit on the terms that you requested for the following reason(s):” from Form C-4, but will include the checklist promulgated in Part I of Form C-1 afterwards.
In addition, we will also be adding original text and fields after the paragraph “We can, however, offer you credit on the following terms:” to indicate some of the more generic terms of a loan being counteroffered (e.g., loan type, amount, term, interest rate, etc.).
Notice of Incomplete Application and Request for Additional Information (Form C-6)
Form C-6 will appear when Field 52370 equals either “Incomplete Application” or “Pre Application Incomplete Application”.
Similar to Form C-4, we will be adding original text and fields to make the form more universal. After the introductory paragraph which informs the borrower as to why the application is incomplete, certain bulleted items will appear based on the configurations of corresponding fields. For example, if “Incomplete Application – From Other Income Sources” (Field 109167) equals “Yes”, then the text “Copy of supporting documentation from any other income sources; such as disability, retirement, pension or social security” will print as a bulleted item. Clients can enter custom text in fields “Incomplete Application Letter Condition” (Field 42368) and “Items Needed to Complete Application” (Field 49534).
While Regulation B does not require a “withdrawal notice” to be provided if a borrower withdraws their loan application (see 12 CFR Pt. 1002, Supp. I, Paragraph 9-2), we will configure the following text to exclusively appear in Cx15858 when Field 52370 equals “Withdrawn”:
“Dear Applicant: This letter is to confirm your decision to withdraw your application for credit.
We thank you for applying and sincerely hope that we may be able to be of service to you in the future.”
Customizations to Cx15858 have not been modified and these versions of Cx15858 will not appear if the logic for triggering these versions conflicts with any customization.
Clients are strongly encouraged to test these versions of Cx15858 before they go into Production, to determine whether the forms are suitable for their business practices or not. Regulation B admonishes that “the sample forms are illustrative and may not be appropriate for all creditors. They were designed to include some of the factors that creditors most commonly consider. If a creditor chooses to use the checklist of reasons provided in one of the sample forms in this Appendix and if reasons commonly used by the creditor are not provided on the form, the creditor should modify the checklist by substituting or adding other reasons. . . . a creditor may design its own notification forms or use all or a portion of the forms contained in this Appendix. . . .” (12 CFR Pt. 1002, App. C)
Other Regulation B Forms
At this time, we will not be creating the other sample forms set forth in 12 CFR Pt. 1002, App. C. Forms C-2 and C-3 are used for the same purposes as Forms C-1 and C-4. Form C-5 (which is used to not disclose the reasons for any adverse action, but to inform the applicant that they can request an explanation for the action) is used in lieu of Form C-1 through C-4, but no clients have requested support for this form. Forms C-7 and C-8 are used in connection with business credit and Form C-10 is for nonmortgage credit. We provide Form C-9 in a separate document (“Notice of Right to Receive Copy of Appraisal Report”; Cx17903).
In order to allow more time for testing, these new Appendix C Forms won’t be in place on Production servers until July 6, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.