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#1112024 - 01/15/09 09:53 PM Pulling credit on spouse not obligated on loan
Spring Alexander Offline
Junior Member
Joined: Aug 2008
Posts: 34
Boise, Idaho
I need some guidance on the following, and couldn't find specific regulatory commentary regarding this issue:

We regularly receive verbal applications for commercial loans. Occasionally, the business is owned by one spouse and the other has no interest or ownership in the business applying for credit. This spouse will not be obligated on the loan as a signer or guarantor, either. Is it permissable to pull a credit report on this spouse? I live in a community property state (Idaho).

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#1112060 - 01/15/09 10:31 PM Re: Pulling credit on spouse not obligated on loan Spring Alexander
Ray_ Offline
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Joined: Aug 2006
Posts: 879
Dallas, TX
I'm not sure how much the community property plays in here, but what would be the permissible purpose for pulling the non-borrowing spouse's credit?

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#1112085 - 01/15/09 11:10 PM Re: Pulling credit on spouse not obligated on loan Ray_
Spring Alexander Offline
Junior Member
Joined: Aug 2008
Posts: 34
Boise, Idaho
I think being in a community property state if the business were unable pay on the debt, we would go after the spouse before seeking payment from the guarantors.

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#1112086 - 01/15/09 11:12 PM Re: Pulling credit on spouse not obligated on loan Spring Alexander
Ray_ Offline
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Joined: Aug 2006
Posts: 879
Dallas, TX
Texas is community property also and we don't pull credit on non-borrowing spouses. That could just be our procedure and not the law.

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#1112157 - 01/16/09 03:08 AM Re: Pulling credit on spouse not obligated on loan Ray_
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,294
Galveston, TX
16 CFR 600 - The old FCRA commentary that has yet to be rescinded:

5. Information on an Applicant's Spouse

A. Permissible purpose. A creditor may request any information concerning an applicant's spouse if that spouse will be permitted to use the account or will be contractually liable upon the account, or the applicant is relying on the spouse's income as a basis for repayment of the credit requested. A creditor may request any information concerning an applicant's spouse if (1) the state law doctrine of necessaries applies to the transaction, or (2) the applicant resides in a community property state, or (3) the property upon which the applicant is relying as a basis for repayment of the credit requested is located in such a state, or (4) the applicant is acting as the agent of the nonapplicant spouse.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1112181 - 01/16/09 11:50 AM Re: Pulling credit on spouse not obligated on loan rlcarey
Ray_ Offline
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Joined: Aug 2006
Posts: 879
Dallas, TX
Thanks for the cite.

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