Hi Milagros. You downplay your experience by saying you're "pretty aware." Obviously, there is no state wide law that compells a Coop board to give a reason for a rejection. I don't necessarily agree with the "arbitrary practice" aspect as I've only encountered one rejection. In that case I knew if my customer got past the board, it was on a wing and a prayer as their financials and work history were less than stellar. I'll never know for sure but those two aspects make it darn likely. I would think there are many other agents/brokers who have had similar situations.
Even if a law is enacted state wide, I would think Coop boards might ratchet up their financial requirements and DTI ratios. I would also think as a board member for a dozen years, you might have come across instances where an application is rejected without an interview if the board felt the contract price was well below market value. So now what could be the consequence of giving a reason for a rejection? Peace of mind to the rejected party(ies)? I doubt it. A lawsuit? Probably. Would any board find that beneficial? I don't have those answers but it will be interesting to see what develops in Suffolk or Nassau counties when the inevitable lawsuit rears it's ugly head and at some point, it surely will.