                                 CODE OF VIRGINIA

STATEMENT OF REASONS FOR ADVERSE ACTION (§ 6.2-503)

A. Each applicant against whom adverse action is taken shall be entitled to a
statement of reasons for the action on the application from the creditor. A
creditor shall satisfy this obligation by:

   1. Providing statement of reasons in writing as a matter of course to
   applicants against whom adverse action is taken; or

   2. Giving written notification of adverse action that discloses (i) the
   applicant&#8217;s right to a statement of reasons within 30 days after receipt
   by the creditor of a request made within 60 days after such notification and
   (ii) the identity of the person or office from which such statement may be
   obtained. The statement may be given orally if the written notification
   advises the applicant of his right to have the statement of reasons confirmed
   in writing on written request.

B. A statement of reasons meets the requirements of this section only if it
contains the specific reasons for the adverse action taken.

C. Where a creditor has been requested by a third party to make a specific
extension of credit directly or indirectly to an applicant, the notification and
statement of reasons required by this section may be made directly by such
creditor, or indirectly through the third party, provided in either case that
the identity of the creditor is disclosed.

D. The requirements of subsections A, B, and C may be satisfied by oral
statements or notifications in the case of any creditor who did not act on more
than 150 applications during the calendar year preceding the calendar year in
which the adverse action is taken, as determined under regulations of the
Commission.

HISTORY: 1977, c. 589, § 59.1-21.21:1; 2002, c. 747; 2010, c. 794.