Adverse Action Notice
A written notice a landlord must provide to an applicant when taking adverse action (denial, conditional approval, higher deposit) based on information in a consumer report. Required under FCRA (15 U.S.C. § 1681m) and Regulation V (12 CFR § 1022.21).
Also known as: denial notice, FCRA adverse action, screening denial notice
Definition
An adverse action notice is a written disclosure that a housing provider must give to a rental applicant when the provider takes an adverse action — such as denial, conditional approval, or a higher deposit requirement — based wholly or partly on information in a consumer report.
Statutory Authority
15 U.S.C. § 1681m(a) (Fair Credit Reporting Act) requires any person who takes adverse action with respect to any consumer based in whole or in part on a consumer report to provide the consumer with:
- Notice of the adverse action
- The name, address, and telephone number of the consumer reporting agency that furnished the report
- A statement that the agency did not make the adverse decision and cannot provide reasons for it
- Notice of the consumer's right to obtain a free copy of the report within 60 days and to dispute inaccurate information
Scope in Housing
CFPB and FTC guidance confirm that adverse action notices are required in housing applications. 12 CFR § 1022.21 (Regulation V) implements the FCRA's adverse action provisions, including the "risk-based pricing" notice rules applicable when a consumer does not receive the most favorable terms.
Timing
The notice must be provided at the time of the adverse action, not delayed. For rental housing, this typically means within the denial or conditional approval communication.
State Enhancements
Many states impose additional requirements beyond FCRA, including specification of the particular screening criteria that led to denial (e.g., Seattle's Fair Chance Housing Ordinance, Washington State's RCW 59.18.257).
Sources
- 15 U.S.C. § 1681m, Cornell LII —
cornell-lii - 12 CFR § 1022.21, eCFR —
ecfr - CFPB: Adverse Action Notices —
cfpb
Frequently asked questions
Statutory Authority
U.S.C. § 1681m(a) (Fair Credit Reporting Act) requires any person who takes adverse action with respect to any consumer based in whole or in part on a consumer report to provide the consumer with: Notice of the adverse action The name, address, and telephone number of the consumer reporting agency that furnished the report A statement that the agency did not make the adverse decision and cannot provide reasons for it Notice of the consumer's right to obtain a free copy of the report within 60 days and to dispute inaccurate information
What does Adverse Action Notice cover?
CFPB and FTC guidance confirm that adverse action notices are required in housing applications. 12 CFR § 1022.21 (Regulation V) implements the FCRA's adverse action provisions, including the "risk-based pricing" notice rules applicable when a consumer does not receive the most favorable terms.
Timing
The notice must be provided at the time of the adverse action, not delayed. For rental housing, this typically means within the denial or conditional approval communication.
State Enhancements
Many states impose additional requirements beyond FCRA, including specification of the particular screening criteria that led to denial (e.g., Seattle's Fair Chance Housing Ordinance, Washington State's RCW 59.18.257).
Sources
U.S.C. § 1681m, Cornell LII — cornell-lii CFR § 1022.21, eCFR — ecfr CFPB: Adverse Action Notices — cfpb