Compliance Question of the Week

On an application we received indirectly from a dealer, I noticed there was not a section for a joint applicant to evidence his or her intent of being a joint applicant. Instead, there was fine wording at the bottom where the co-applicant affirmed the accuracy of the information and evidenced his or her intent to be the joint applicant. Is this okay?

That may be an issue. It totally contradicts the commentary from Reg B:

“3. Evidence of joint application. A person’s intent to be a joint applicant must be evidenced at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. On the other hand, signatures or initials on a credit application affirming applicants’ intent to apply for joint credit may be used to establish intent to apply for joint credit. (See Appendix B.) The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit.”

Related Links

Reg B Commentary 1002.7(d)
FDIC Guidance FIL-6-2004

FRB Consumer Compliance Update 2008

FRB Banking Supervision Letter

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance, NWCUA.