Some of the lenders at my bank are having a really hard time with this change to Reg B regarding disclosing specific reasons to the primary applicant as to why the co-applicant/co-signer doesn't qualify (del. credit, bankruptcy etc.). It seems to be especially hard to understand with a co-signer situation. They don't believe that we should tell the primary applicant about the co-signer's bad credit history. It is my understanding that we will be in violation of Reg B if we use statements on the primary applicant's AAN such as "co-signer doesn't qualify". Is anyone else getting any resistance? I think we've harped on privacy so long that they just don't think this could be true.

Applicants lose the "privilege of privacy" between them when the apply jointly. You still have an FCRA issue, but not a privacy concern.

And a co-signer would also lose their privacy, correct? Even though they are not a co-applicant?

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Is anyone else getting any resistance?

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Actually our lenders like the idea.

So you wouldn't give specific reasons like bankruptcy, chargeoff etc, you would just say "bad credit" or "delinquent credit"?? I have told them they have to be specific and use the reasons on the AAN.

You must provide specific reasons for denial.

This is NOT a privacy issue. Page 13151 of the Federal Register, dated 3/18/03 makes it very clear:

Many commenters were concerned about the co-applicant’s or guarantor’s privacy when the reasons for adverse action pertaining to creditworthiness are given to the primary applicant. When a person agrees to be a co-applicant,
guarantor, or similar party, however, there is (or should be) a general understanding that information will be shared. Accordingly, the rule has been adopted as proposed.