What must lenders provide to applicants under the ECOA if a loan application is denied?

Under the Equal Credit Opportunity Act (ECOA), when a lender denies a loan application, they are required to provide an adverse action notice. This notice serves a crucial purpose as it informs the applicant of the decision to deny the credit and provides specific details regarding the reasons for the denial. It also outlines the applicant's rights under the ECOA, allowing them to understand what factors influenced the decision and helping ensure transparency in the lending process.

The adverse action notice must include key information such as the reasons for denial, the identity of the creditor, and a notice of the applicant's right to request a copy of their credit report. This requirement is essential in promoting fair and responsible lending practices, as it prevents discrimination and helps applicants improve their creditworthiness in the future.

While the other choices may pertain to aspects of loan application processing, they do not fulfill the specific requirement set by the ECOA regarding notification for denied applications. A statement of the financing charge and a summary of loan terms are more relevant to disclosures required upon loan approval, and while a confirmation of application receipt is helpful, it does not meet the regulatory obligation tied to denial notifications.