What may a creditor do in response to an application for credit from a business with gross revenues of $1 million or less?
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A. B. C. D.A
The answer to this question is A. When a creditor receives an application for credit from a business with gross revenues of $1 million or less, they may give a disclosure of the applicant's right to receive a statement of reasons at the time of the application instead of at the time of the adverse action. This disclosure is provided in accordance with the Equal Credit Opportunity Act (ECOA).
The ECOA is a federal law that prohibits creditors from discriminating against applicants based on their race, color, religion, national origin, sex, marital status, age, or because they receive public assistance. The law requires creditors to provide applicants with certain disclosures and notifications, such as the ECOA statement, adverse action notices, and statement of reasons for adverse action.
An adverse action notice is a notification provided to an applicant when a creditor takes an adverse action against them, such as denying their credit application, increasing the cost of credit, or changing the terms of credit. The notice must include the specific reasons for the adverse action, and the applicant's right to obtain a statement of reasons for the adverse action within 60 days.
However, in the case of a business with gross revenues of $1 million or less, the creditor may provide a disclosure of the applicant's right to receive a statement of reasons at the time of the application instead of at the time of the adverse action. This means that the creditor can inform the applicant of their right to obtain a statement of reasons for adverse action in advance, so that they are aware of the process and can request the statement if needed.
It is important to note that the creditor must still provide the ECOA statement to the applicant, which informs them of their rights under the law and provides contact information for the appropriate regulatory agency. The creditor cannot omit the ECOA statement on any notices or communications.
In summary, when a creditor receives an application for credit from a business with gross revenues of $1 million or less, they may give a disclosure of the applicant's right to receive a statement of reasons at the time of the application instead of at the time of the adverse action, but they must still provide the ECOA statement to the applicant.