Implementing the Adverse Action Initiative for Auto Dealerships

The Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA) require that an Adverse Action notice (also called a Notice of Credit Denial) is provided to the customer when an Adverse Action is taken.  For purposes of credit transactions, "adverse action" means (1) Denying credit to an applicant; (2) Refusing to grant credit in substantially the amount or on substantially the terms requested by the applicant, unless the applicant accepts your counteroffer; or (3) Any action taken or determination that is adverse to the interests of the consumer (for example, unwinding a spot delivery).  

Implementation Steps in this Guide

1. Edit and Distribute the Adverse Action Policy for Credit Transactions Policy for Auto Dealers Policy

2. Review and Assign the Adverse Action Documents

3. Assign the Adverse Action Training(s)

Edit and Distribute the Adverse Action Policy for Credit Transactions Policy for Auto Dealers Policy

Edit the policy:

1. Click on the Library tab
2. Search for "Adverse Action Policy for Credit Transactions Policy for Auto Dealers Policy" and click on it
3. Click on the Edit button to view the list of versions
4. Click Create Draft to the right of the latest published version
5. Click Edit next to the Draft version that you just created
6. Make desired changes to the policy
7. Click Publish when you have finished editing the policy

Schedule the activity for distribution:

1. Click on the Workspaces tab
2. Click on the Consumer Finance workspace
3. Click on the Adverse Action initiative
4. Click on the Adverse Action Policy for Credit Transactions Policy for Auto Dealers Policy
5. Click on Groups and assign to the appropriate groups, such as management, controller, sales, finance and insurance, cashiers, and anyone who participates in a credit transaction or is responsible for sending an adverse action notice.
6. Click on Schedule and set an annual schedule based on the Hire Date. We recommend that you set the Immediate Distribution option to Yes. 
7. Click Save

Review and Assign the Adverse Action Documents

1. Click on the Library tab
2. Search for the following documents, click on and following the steps below for each one:
   • Adverse Action Notices, Answers to Tough Questions Document
   • Adverse Action Flowchart Document
   • Notice of Credit Denial Sample Form (California) Document
   • Notice of Credit Denial Sample Form (Federal) Document
3. Click on the Attachment to review the document
4. Click on Permissions and set which groups can view these documents. We recommend management, controller, sales, finance and insurance, cashiers, and anyone who participates in a credit transaction or is responsible for sending an adverse action notice.

Assign the Adverse Action Training(s)

Schedule the activity for distribution:

1. Click on the Workspaces tab
2. Click on the Consumer Finance workspace
3. Click on the Adverse Action initiative
4. Click on the Adverse Action Training or the Adverse Action in California Training (as applicable)
5. Click on Groups and assign to the appropriate groups, such as management, controller, sales, finance and insurance, cashiers, and anyone who participates in a credit transaction or is responsible for sending an adverse action notice. Note that you can create location- and job-based dynamic groups to distribute the correct training to employees at both California and non-California dealerships.
6. Click on Schedule and set an annual schedule based on the Hire Date. We recommend that you set the Immediate Distribution option to Yes. 
7. Click Save