How long does a lender have to notify an applicant of an adverse action under ECOA?

Under the Equal Credit Opportunity Act (ECOA), a lender is required to notify an applicant of an adverse action within 30 days after receiving the application. This timeframe is established to ensure that applicants are promptly informed about the decision on their credit application, allowing them to understand and address any potential issues that may have led to the adverse decision. The 30-day notification period is part of the regulatory measures designed to promote fair lending practices, ensuring transparency and accountability in the credit process.

While other options may suggest different periods, they do not align with the specific requirement outlined in ECOA. The 30-day notification timeline is crucial for maintaining compliance with fair lending laws and helps borrowers remain informed about their creditworthiness and any necessary steps they might need to take following an adverse action.