West Virginia Mortgage Law Practice Test

In declining the Barkers' loan application, John must provide notice of adverse action within ____ of receiving the completed application.

1. 15 days

2. 30 days

3. 45 days

4. 60 days

The correct answer is: 15 days

In the context of the Fair Credit Reporting Act and the Equal Credit Opportunity Act, financial institutions are required to notify applicants of adverse actions, including declination of a loan application. The important timeframe for providing this notice is within a specific duration after the lender has received a completed application. When a lender like John receives a completed loan application, they have a regulatory obligation to inform the applicants, in this case, the Barkers, if the loan has been denied. The requirement mandates that this notice must be delivered within 15 days of the receipt of the completed application. This quick turnaround is intended to ensure transparency in lending practices and allow the applicants to understand the reasons for the refusal, as well as any potential options they may have. This 15-day timeframe is significant as it is designed to help protect consumers by ensuring they are informed promptly, allowing them to make any necessary adjustments or seek alternative financing without undue delay.