What is the term used to notate the reasons for the denial of the loan?

The term "Adverse Action" is the correct choice as it specifically relates to the legal and regulatory requirement for lenders to notify applicants when their loan application is denied or adverse action is taken. This terminology is commonly used in the context of lending and is aligned with the Equal Credit Opportunity Act (ECOA), which mandates that lenders provide a notice of adverse action that explains the reasons for the denial. This ensures transparency and allows applicants to understand why their application was not approved, which is crucial for maintaining trust and compliance within the lending process.

The other terms might not capture the regulatory aspect or standardized terminology used in financial services. For instance, while a "Rejection Note" or "Loan Decline" might convey the general idea of a loan being denied, they do not have the specific legal implications or requirements associated with them. Similarly, "Denial Memo," while it suggests an internal document or communication, does not reflect the formal terminology required in the context of lending regulations.