What are consumer rights when denied for Loan

A Bank approved my small business for a 30k line of credit and wrote us a letter of offer with a list of conditions before disbursement. After paying off 3 credit cards for 2500, loan appl fee 200, appraisal fee 400, and 2% loan fee of 600, they denied the loan because another bank gave us an equipment loan of 20k. They said the fees are non refundable. Are there consumer rights violated by the Bank?,

3 Answers

Commercial loans fall into a different category than residential mortgages. I can certainly see where borrowing additional funds during your loan process would significantly change your obligations, so doesn't seem illogical that taking out that second loan could have given them a reason (good or otherwise) to deny your loan. One of the things I always tell my clients is to NOT take out any new accounts during the mortgage process, or to even apply for additional credit. Same would hold on the commercial side.

While I understand you frustration - there is no final loan "approval" on any loan from any lender until you are sitting at the closing table signing all the papers.

All loan officer try to do the best job possible up front to assess your situation. Then as underwriting does their job, there are many possible things that can pop up and be discovered that can derail a loan.

The only fee that you may be able to get waived is the 2% loan fee for $600. Since the loan did not close, they may waive this. The application fee and the appraisal, however, are non-refundable. The good side is that you no longer owe on 3 credit cards - if that is any compensation.