An adverse action notice is a critical communication that informs an applicant their loan request has been denied, and it's mandated by regulations such as the Equal Credit Opportunity Act (ECOA) and Fair Credit Reporting Act (FCRA). Failing to send this notice isn't just a compliance oversight—it can lead to hefty fines, legal penalties, and potential lawsuits. Beyond the legal risks, neglecting to issue adverse action notices can erode consumer trust and tarnish your reputation. With so much at stake, ensuring these notices are handled accurately and efficiently is paramount.