Dealer glossary
Adverse action notice
The notice a customer receives when a credit application is declined or approved on less favourable terms than requested.
Definition
When a credit application does not get approved as submitted, the applicant is entitled to be told, and told why. That notification is an adverse action notice.
For a dealership the operational question is that it has to happen reliably and on time for every affected application, which is difficult when applications go to several lenders and the decisions come back separately.
The requirements are set by federal law and enforced by regulators. What applies to your store is a question for your compliance advisor and the relevant authority, not for a vendor glossary.
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