1. Adverse Action Policy, Procedure and Form
Adopted 6/2015

2. Why is an Adverse Action Notice Required?
Federal Laws and Regulations

3. Federal Laws and Regulations Equal Credit Opportunity Act (ECOA)
Purpose Among other things, ECOA requires that Adverse Action Notices be sent to customers when a loan is either denied or a counter-offer is made and not accepted. Let’s take a look at ECOA and what it affects at FastBucks…

4. Federal Laws and Regulations -Equal Credit Opportunity Act-
Purpose
ECOA prohibits discrimination against credit applicants and co-applicants on the basis of race, color, religion, national origin, sex, marital status, age, receipt of income from a public assistance program, or the good faith exercise of any right under the federal Consumer Credit Protection Act.
Regulation B imposes certain obligations to assist efforts to monitor compliance with ECOA. Information may be requested from loan applicants for the purpose of monitoring creditworthiness—however, information that is irrelevant to creditworthiness will not be used to unfairly discriminate against loan applicants. ECOA applies to both business and consumer loans, and prohibits discrimination in all phases of lending practices.

5. FastBucks Policy Policy
It is FastBucks’ policy to comply with ECOA and with Regulation B.
FastBucks will not discourage applicants from applying for loans on the grounds of any prohibited basis. All applications will be considered on neutral credit factors such as ability to pay or credit history.

6. FastBucks Policy Policy
ECOA affects many areas of our customer relationship.
1. Marketing and Advertising
2. Taking Applications
3. Evaluating Applications
4. Notifications
FastBucks has established documented policies, procedures and forms (internal controls) to prohibit discrimination or discouragement on prohibited bases.

7. MARKETING AND ADVERTISING
FastBucks Policy

8. FastBucks Policy Marketing and Advertising
The FastBucks Compliance Officer reviews all marketing and advertising materials, prescreened solicitations and criteria for evaluating potential recipients to ensure that FastBucks does not:
Make any oral or written statements, in advertising or otherwise, to applicants or prospective applicants that would discourage on a prohibited basis a reasonable person from making or pursuing an application.
Use statements that the applicant should not bother to apply based on a prohibited basis.
Use words, symbols, models or other forms of communication in advertising that express, imply, or suggest a discriminatory preference or a policy of exclusion in violation of ECOA.
Use scripts that discourage applicants on a prohibited basis.
Use discriminatory criteria for prescreened solicitations.
Use text in prescreened solicitations that would tend to discourage, on a prohibited basis, a reasonable person from making or pursuing an application.

9. TAKING APPLICATIONS
FastBucks Policy

10. FastBucks Policy Taking Applications
The FastBucks Compliance Officer reviews all application forms, disclosures and training to ensure that FastBucks does not :
Use designations of title, such as Ms., Miss, Mrs., or Mr., on an application form.
Use information concerning a spouse or former spouse unless: (1) the spouse will be permitted to use the account; (2) the spouse will be contractually liable on the account; (3) the spouse’s income is relied upon by the customer as a basis for repayment of the credit requested; (4) the applicant lives in a community property state or is relying on property located in such a state as a basis for repayment of the credit requested; or, (5) the applicant is relying on alimony, child support, or separate maintenance payments from a spouse or former spouse as a basis for repayment of the credit requested.
Inquire about marital status unless the applicant resides in a community property state or is relying on property located in such a state as a basis for repayment of the credit requested.
Use terms other than “married”, “unmarried”, and “separated” (explaining that “unmarried” includes single, divorced and widowed persons).
Inquire about income stated in the application regarding alimony, child support or separate maintenance payments without disclosing to the applicant that such income need not be revealed if the applicant doesn’t want FastBucks to consider the information in determining the applicant’s creditworthiness.

11. EVALUATING APPLICATIONS
FastBucks Policy

12. FastBucks Policy Evaluating Applications
The FastBucks Compliance Officer reviews and evaluates training, audits, policies and procedures to ensure that FastBucks does not use :
Age as a determining factor to negatively evaluate creditworthiness.
Income derived from public assistance to negatively evaluate creditworthiness.
Potential childbearing or childrearing as a factor to negatively evaluate creditworthiness.
Applicant’s country of origin to negatively evaluate creditworthiness.
Applicant’s marital status to negatively evaluate creditworthiness.
Race, color, religion, or sex to negatively evaluate creditworthiness.

13. NOTIFICATIONS
FastBucks Policy

14. FastBucks Policy
Notifications Applicants will be notified of each loan decision for any application that is received and FastBucks will comply with the notification and adverse action notices required by ECOA and Regulation B.

15. RECORD RETENTION
FastBucks Policy

16. FastBucks Policy Record retention
FastBucks will keep the original or a copy of the following documents for a minimum of 25 months from the date of the action:
the application and the information obtained for purposes of monitoring compliance with anti-discrimination statutes;
any written information used in evaluating the request
a copy of the notification provided to an applicant and a statement of specific reasons for any adverse action

17. Adverse Action Notices—When and How to Send them

18. When is an Adverse Action Notice Required?
FastBucks Procedure

19. FastBucks Procedure
When is an Adverse Action Notice Required?
According to ECOA, a Lender is required to notify any applicant for a Loan of action taken on the Application (denial or approval) within 30 days of receiving a completed Application.
An “adverse action” includes refusing to grant a Loan in substantially the amount or on substantially the terms requested in the Application, unless the Lender makes a counteroffer and the Applicant uses or expressly accepts the Loan offered.

20. FastBucks Procedure When is an Adverse Action Notice Required?
Whenever a Lender takes an adverse action, it must provide, in writing, a notice of adverse action and a statement of the specific reasons for the adverse action or direction to the consumer to request the statement of specific reasons.
Circumstances under which Adverse Action Notices must be provided to the customer:
1. Denial of Loan (No loan can be offered)
2. Denial of Type of Loan Requested—But, Counter Offer Made

21. FastBucks Procedure When is an Adverse Action Notice Required?
Denial of Loan (no loan Can be Offered)
When a customer requests a loan and it cannot be extended for any reason, FastBucks must send (via mail within 30 days) or hand-deliver (immediately) a Notice of Adverse Action to the customer.

22. FastBucks Procedure When is an Adverse Action Notice Required?
Denial of Type Loan Requested—But, Counter-Offer Made
When a customer requests a loan, and FastBucks is unable to offer the loan at the terms requested by the customer, FastBucks may make a counter-offer (via mail within 30 days) or in person (immediately).

23. FastBucks Procedure When is an Adverse Action Notice Required?
Denial of Type Loan Requested—But, Counter-Offer Made
CUSTOMER ACCEPTS COUNTER-OFFER: If the customer accepts the counter-offer, FastBucks is not required to send or hand-deliver a Notice of Adverse Action.
CUSTOMER DOES NOT ACCEPT COUNTER- OFFER: If the customer does not accept the counter-offer, FastBucks is required send (via mail within 30 days) or hand- deliver (immediately) a Notice of Adverse Action to the customer.

25. What does an Adverse Action Notice say?
FastBucks Procedure

26. FastBucks Procedure What does an Adverse Action Notice Say?
A Notice of Adverse Action is a letter that outlines the principal reasons for denying, terminating or taking other action on a loan application. Furthermore, the Notice of Adverse Action makes a statement that a third party affiliate (Tele-track) may have provided information to help FastBucks make its decision to offer a loan to the customer. Finally, the Notice of Adverse Action gives the customer notice of the federal laws pertaining to the extension of credit.

27. FastBucks Procedure What does an Adverse Action Notice Say?
FastBucks has a standard Notice of Adverse Action letter that has been authorized for use.
On the next few slides, we will look at the approved form for the Adverse Action Notice.

28. How do I complete the Adverse Action Notice?
FastBucks Form

29. Overview of Adverse Action Letter

30. First Page of Letter TOP Store Information Customer Information
Application Date

31. First Page of Letter
BOTTOM
Choose
1-4
$ Amt Requested
$ Amt offered

32. Second Page of Letter
TOP
Non TT
Decline

33. Second Page of Letter TOP TT Decline TT # Date TT Requested
Decline Reason

34. FastBucks Form
Instructions for Completing the Notice of Adverse Action Letter
1. Enter and/or proofread the store information, the date, the applicant name, applicant address, city, state, zip.
2. Choose the loan denial option loan by placing a checkmark or X in the box provided.
If you choose the counter-offer option,
Enter the “LOAN OFFER DETAILS” in the space provided.
This includes: TT score, date, and reason.
3. Place a checkmark or X in the box provided next to any and all of the applicable reasons for credit denial, termination, or other action taken. Numerous options exist on adverse action notices for reasons for the action taken. In providing documentation to the applicant, provide all of the main reasons for the action; however, providing more than four reasons should generally be avoided.

35. FastBucks Form
Instructions for Completing the Notice of Adverse Action Letter 4. Choose the loan denial option that is not based on the TT score by placing a check or an X in the field adjacent to this option. 5. OR, Choose the loan denial option that is based on the TT score by placing a check or X in the field adjacent to this option. NOTE: Only choose 1 option. 6. If it is a TT based decline, enter score, date, and reason. Take reason from the TT report.

36. FastBucks Form
Here are the circumstances under which each reason should be used:
ADVERSE ACTION REASON
EXPLANATION
Income is below our minimum requirement
Should only be used where borrower’s current debt-to-income ratio is within standards, but when requested credit is added in (and any debts to be paid off are subtracted), the ratio exceeds the standards.
Income is insufficient to sustain payments on the amount of credit requested.
Should be used where borrower’s existing debt-to-income exceeds standards even before adding in the requested credit.
Employment is not of sufficient length to qualify.
Should be used where applicant does not meet standard of stable employment (not necessarily the same job, but some degree of stability for two years must be established). Include temporary or irregular employment.
Employment could not be verified.
Should only be used if attempt is made to verify employment through direct contact. File must document what attempts were made to verify employment.
Credit history of making payments on time was not satisfactory
Should be used where credit report indicates payment history with past or present credit, which does not meet our standards. This could include garnishment, foreclosure, BK, repossession collection actions, or judgments.
Credit history could not be verified
Should be used when credit report is inconclusive.

37. FastBucks Form
Here are the circumstances under which each reason should be used:
ADVERSE ACTION REASON
EXPLANATION
Application lacks a sufficient number of credit references
Should be used when credit report shows no credit history.
Application lacks acceptable types of credit references
Should be used when credit report shows lack of qualifying credit history.
Application reveals that current obligations are excessive in relation to income.
Should be used where borrower’s existing debt-to-income exceeds standards even before adding in the requested credit.
Other, specify:
Residency – length less than minimum allowed by product list.
Residency – address is temporary, not permanent.
Residency – could not be verified through direct contact such as with a landlord. File must document what attempts were made to verify residence.
No product available for members of the military available.
Counter Offer
Any situation in which a loan cannot be funded at requested dollar amount, but a lower counter offer is made by product list.
Note: If applicant has offered collateral, file should be documented as to the value of the collateral and how determined.

38. ENFORCEMENT OF POLICY, PROCEDURE AND FORM
What are the Penalties for not complying with the Adverse Action Notice (ECOA) Policy, Procedure and Form?
Part of the procedure is enforcement. Failure to comply with ECOA imposes civil liability which may result in litigation and costly penalties for FastBucks. As such, sending out Adverse Action Notices to customers will be on the Audit reports we receive from our Internal Auditors. The Audit Reports will be reviewed by the Corporate Compliance Officer, and any deficiencies in the outlined procedure will be addressed.
Failure to provide the customer with an Adverse Action Notice as outlined in the procedure above can result in progressive disciplinary action as outlined in the FastBucks Discipline Policy.

39. FastBucks Policy, Procedure and Form
FastBucks has adopted a policy and a procedure for giving the customer Adverse Action Notices when required, which includes credit disclosure information, if applicable.
FastBucks has a standard Notice of Adverse Action letter that has been authorized for use.
FastBucks has outlined the penalties that will result in non-compliance with the policies and procedures outlined.

40. Any Questions?
Presentation edited 06/2015