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#1576070 - 07/11/11 02:29 PM Reg B-Notice of Intent to Apply For Joint Credit
ougirl Offline
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ougirl
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oklahoma
We recently had auditors and were written up for not having the intent for joint credit form signed by our commercial customers. We have several that are companies owned by husband but wife guarantees. They said we needed this form signed by both. We thought these were to be signed by consumer credit apps? We don't have any apps completed on commercial loans?? Where in the reg does this say for commercial customers also?

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#1576076 - 07/11/11 02:33 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
Dan Persfull Offline
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Reg B has always applied to business (commercial) purpose credit. See the Commentary to 202.1.
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#1576079 - 07/11/11 02:38 PM Re: Reg B-Notice of Intent to Apply For Joint Credit Dan Persfull
COMPLIcated Offline
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We don't always have a business credit application on our commercial loans but we have been able to use a signed guaranty agreement by all owners of the account as joint intent. If we do not have those in the file then our lenders have to have them sign the joint intent. This has been fine with our external auditors and examiners.

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#1576083 - 07/11/11 02:40 PM Re: Reg B-Notice of Intent to Apply For Joint Credit COMPLIcated
ougirl Offline
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ougirl
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We do have signed guarantee agreements in file...so are the joint intent forms still needed?

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#1576094 - 07/11/11 02:59 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
Dan Persfull Offline
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The joint intent has to be established at the time of application, whether it's written or oral. If you have not been doing this and getting by with it you have been lucky.

If your written loan policy requires that all closely held businesses must be guaranteed by the principals then the joint intent is not needed, or if the the guaranty is an underwriting condition placed on the request the intent is not needed.

Also: We have several that are companies owned by husband but wife guarantees.

I hope you have some very strong and compelling reasons asking the wife to guarantee the debt if she is not part of the corporation otherwise you have more serious issues than not getting the intent established.
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#1576098 - 07/11/11 03:02 PM Re: Reg B-Notice of Intent to Apply For Joint Credit Dan Persfull
ougirl Offline
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ougirl
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Thank you very much for you information.

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#1576192 - 07/11/11 04:51 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
rlcarey Offline
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"We have several that are companies owned by husband but wife guarantees."

I hope the wives bring something to the party, otherwise these are classic examples of signature rule violations.
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#1595202 - 08/23/11 04:06 PM Re: Reg B-Notice of Intent to Apply For Joint Credit rlcarey
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Just to make sure I understand - if we have a loan that is in the names of the individuals (husband and wife) and the purpose of the loan is business (put cash into the business) - we should have the Intent to Apply for Joint Credit" form completed - Correct?

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#1595209 - 08/23/11 04:14 PM Re: Reg B-Notice of Intent to Apply For Joint Credit traveler
Kathleen O. Blanchard Offline

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Yes.
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#1595342 - 08/23/11 06:39 PM Re: Reg B-Notice of Intent to Apply For Joint Credit Kathleen O. Blanchard
David Dickinson Offline
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Kathleen is right. I did a 2 hour webinar on Reg B/Joint Intent. You can find more info in the BOL Banker Store:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1760
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#1595766 - 08/24/11 03:32 PM Re: Reg B-Notice of Intent to Apply For Joint Credit rlcarey
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Originally Posted By: rlcarey
"We have several that are companies owned by husband but wife guarantees."

I hope the wives bring something to the party, otherwise these are classic examples of signature rule violations.



I just found one of these. Arg. I know we have a violation... so where do we go from here? So far I know we'll have to re-train and I want to do a full scrub of all loans with joint spouses or spouses that guarantee to see if this was an isolated incident. What else? Is it worth it to try and obtain her intent to guarantee now?

Anyone have any Advil? frown
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#1595772 - 08/24/11 03:40 PM Re: Reg B-Notice of Intent to Apply For Joint Credit manimal
Dan Persfull Offline
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Quote:
Is it worth it to try and obtain her intent to guarantee now?


The intent must be established at application, not at some point after consummation. Getting their intent now would not resolve the issue.

If the signatures were obtained in violation of law then most likely in a court proceedings their liability for the debt will be dismissed.

The only way to effectively cure a spousal signature requirement violation is to release them from their liability/guaranty.
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#1595798 - 08/24/11 04:02 PM Re: Reg B-Notice of Intent to Apply For Joint Credit Dan Persfull
manimal Offline
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Thank you for your insight!

I think releasing her liability is what I will recommend to the LO.
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#1597801 - 08/29/11 07:57 PM Re: Reg B-Notice of Intent to Apply For Joint Credit manimal
traveler Offline
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Clarification needed:
If loan is in the name of tow businesses - is Intent to Apply for Joint Credit required?

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#1597842 - 08/29/11 08:27 PM Re: Reg B-Notice of Intent to Apply For Joint Credit traveler
Dan Persfull Offline
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Yes. They are applicants under Reg. B.
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#1771071 - 12/28/12 06:30 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
ComplytillIdie Offline
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If I have an application with XYZ Corp I and XYZ Corp II as borrowers and Mickey Mouse and Donald Duck as Guarantors - I would need a Notice of Joint Intent for the two business entities, but not for the guarantors correct?

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#1771118 - 12/28/12 08:30 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
Jerod Moyer Offline
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Yes you would need an intent for the two business, as Dan stated above both corporations are applicants under Reg B. The guarantors would not require an intent to apply so long as they are partners, directors or officers of a business, and the shareholders of a closely held corporation.
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#1854382 - 09/20/13 09:32 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
cheech Offline
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If there is only 1 owner of the business is this still required?

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#1854455 - 09/23/13 12:57 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
Dan Persfull Offline
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If you are referring to the one owner being a required guarantor then see Jerod's above comment.
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#2010174 - 04/24/15 05:26 PM Re: Reg B-Notice of Intent to Apply For Joint Credit Dan Persfull
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only if I want to....
I know this is beating a dead horse slap to death and I'm sorry but we are having some disagreements with LO's...know you guys never have that around your place right whistle crazy Reading the regulation does not seem to get us seeing eye to eye either b/c one will interpret one way and one another...

I have a loan that is to ABC, LLC. We have done a line of credit loan for them b/c they have a car lot and purchase individual cars at different places one at a time.

John Apple and Jane Apple own the business. Financials are submitted for LLC once a year...credit pulled on both (once a year not every time they do a loan)...guarantor forms signed by both once a year and each loan...

In a case such as this does Joint Intent need to be indicated in each file each time they purchase a new car for their fleet?
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#2010267 - 04/24/15 07:16 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
David Dickinson Offline
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You could OR at the beginning of the year, you could establish one application for all credit requests anticipated. 1 Joint Intent at that time would cover all future loans already discussed, applied for and anticipated.

However, any loans outside of what was already jointly applied for at that time would trigger a new application/new join intent requirement.
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#2010281 - 04/24/15 07:28 PM Re: Reg B-Notice of Intent to Apply For Joint Credit David Dickinson
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only if I want to....
Originally Posted By David Dickinson
You could OR at the beginning of the year, you could establish one application for all credit requests anticipated. 1 Joint Intent at that time would cover all future loans already discussed, applied for and anticipated.

However, any loans outside of what was already jointly applied for at that time would trigger a new application/new join intent requirement.


Thanks David! So the Loan Officer's argument is that this is an LLC "managed" by 1 member...but we in compliance say that is incorrect and at some point like as you state either at the beginning of the renewal process for this "fleet" of vehicles or at each application...one of the two we need to have them indicate joint intent since they are both owners and guarantors. Did I interpret that correctly as to what you are saying?
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#2010329 - 04/24/15 08:44 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
David Dickinson Offline
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If the LLC is the only applicant, then there is no need for Joint Intent. If you're requiring them to guaranty the loan (as officers, directors, shareholders or partners), Joint Intent is still not required, because they aren't applying that way - you're making them guaranty the loan.

If John and Jane Apple are signing individually or are voluntarily guaranteeing the loan, then they are applicants in addition to the LLC and Joint Intent is necessary.
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#2010335 - 04/24/15 08:54 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
KTMiteComply Offline
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only if I want to....
Thanks so very much David...you are the bomb.com smile
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#2010337 - 04/24/15 08:58 PM Re: Reg B-Notice of Intent to Apply For Joint Credit ougirl
David Dickinson Offline
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...you are the bomb.com
I'll take that as a compliment . . . I think. wink
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