In which situation must dealers provide Adverse Action Notices?

Adverse Action Notices are required in situations where a credit application results in a negative outcome for the consumer, such as when credit is denied or when terms that are less favorable than requested are offered. This requirement is in place to inform the consumer of adverse actions taken against them regarding their credit application.

In the scenario where a credit application is not submitted for approval, if a dealer does not process a credit application for any reason, the consumer may be negatively impacted by not having access to the credit they were seeking. It is important for the dealer to inform the consumer of this action, as it helps maintain transparency and allows the consumer to understand their rights and options moving forward.

The other situations, such as approving a credit application or requesting more information, do not align with the circumstances that necessitate an Adverse Action Notice, as these actions do not reflect a negative decision regarding creditworthiness. Thus, the correct context for requiring Adverse Action Notices hinges on informing consumers of decisions that adversely affect their credit applications.