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Deposit Account Required for Loan Approval?
Answer by Randy Carey, BOL Guru
Guru Bio
Question: If an applicant meets our lending guidelines (credit, debt ratio, etc.) can we as the lender require the applicant to establish a depository relationship with our bank before we approve the loan request (for a mortgage and/or consumer loan)?
Answer: Can you? Yes, you could. However, depending on the demographics of your market place, it may have a disparate impact on sections of the population that don't normally maintain deposit accounts. Reg E would also prevent you from requiring the loan to be paid automatically through an auto debit to the deposit account. With all banks struggling to maintain quality loan portfolios, you have to ask yourself why would you place such a hurdle in front of a customer?
First published on BankersOnline.com 4/21/08
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