Which of the following actions is NOT an adverse action?
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A. B. C. D.C
The term "adverse action" is defined under the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, which requires that creditors provide a written notice to a credit applicant when the creditor takes certain actions that adversely affect the applicant's credit application. An adverse action notice must be provided to the applicant if the creditor takes any of the following actions:
A. Refusal to grant credit on substantially the same terms and conditions as requested by the applicant B. Termination of an account D. Refusal to increase the amount of credit on an existing account after a request
Therefore, the answer to the question is (C) Refusal to grant credit on the grounds that the lender does not offer the type of credit requested, as this is not considered an adverse action under the ECOA and Regulation B. When a creditor denies a credit application based on the type of credit requested, it is not considered an adverse action because the creditor is not evaluating the creditworthiness of the applicant. However, the creditor must still provide a notice of action taken if the applicant requests it.