When is a dealership required to keep records of the adverse action notices sent?

A dealership is required to keep records of adverse action notices sent for five years after the notice is sent. This requirement is in line with the Fair Credit Reporting Act (FCRA), which mandates that creditors retain records of adverse action taken based on information in a consumer report. The purpose of this regulation is to ensure transparency and accountability in lending practices, allowing consumers to understand the reasons for adverse actions taken against them. Maintaining these records for a five-year period serves to provide a reference for compliance audits and helps protect consumers’ rights by ensuring that the reasons for adverse actions are documented and accessible for review if needed.