Skip to content
BOL Conferences
Thread Options
#2148544 - 10/04/17 01:32 PM Joint intent for business owners
Compliance Nut Offline
100 Club
Joined: Feb 2016
Posts: 196
If you have a loan that is for business purposes and is made to a business entity AND to multiple borrowers individually (who are all officers of the company), is it necessary to get each of their intent to apply jointly? If they sign a corporate resolution to borrow, would that be sufficient to evidence their intent to apply jointly?

Return to Top
Lending Compliance
#2148553 - 10/04/17 01:51 PM Re: Joint intent for business owners Compliance Nut
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
If they are applying individually for the loan with the business, then yes - joint intent is required. If it is you bank policy that you require the owners or officer to guarantee the business loan, then no.

Paragraph 7(d)(6).

1. Guarantees. A guarantee on an extension of credit is part of a credit transaction and therefore subject to the regulation. A creditor may require the personal guarantee of the partners, directors, or officers of a business, and the shareholders of a closely held corporation, even if the business or corporation is creditworthy. The requirement must be based on the guarantor's relationship with the business or corporation, however, and not on a prohibited basis. For example, a creditor may not require guarantees only for women-owned or minority-owned businesses. Similarly, a creditor may not require guarantees only of the married officers of a business or the married shareholders of a closely held corporation.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2148557 - 10/04/17 02:00 PM Re: Joint intent for business owners rlcarey
Compliance Nut Offline
100 Club
Joined: Feb 2016
Posts: 196
Originally Posted By rlcarey
If it is you bank policy that you require the owners or officer to guarantee the business loan, then no.


Even if it is our policy to require owners or officers to guarantee the loan, if we are not taking them as guarantors, but actually joint borrowers, then are you saying we would not have to get their intent to apply joinly?

Return to Top
#2148568 - 10/04/17 02:30 PM Re: Joint intent for business owners Compliance Nut
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
No - he's saying the opposite. If they are applying as joint borrowers then the joint intent is required.
_________________________
My Opinions Only

Return to Top
#2148573 - 10/04/17 02:40 PM Re: Joint intent for business owners Compliance Nut
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree. The logic is you're REQUIRING the guarantor. They aren't applying on their own free will. Why would they sign a statement that says "I am applying"?

If you have voluntary guarantors, you need Joint Intent documentation. If you require guarantors, you don't.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#2148600 - 10/04/17 03:24 PM Re: Joint intent for business owners David Dickinson
Compliance Nut Offline
100 Club
Joined: Feb 2016
Posts: 196
Originally Posted By David Dickinson
If you have voluntary guarantors, you need Joint Intent documentation. If you require guarantors, you don't.


When you say "volunteer", are you meaning, after underwriting was completed and a guarantor is request and someone volunteers their guarantee, THEN you would have to obtain their intent to apply jointly?

That doesn't make sense to me since the intent to apply jointly is obtained at the time of application.

Return to Top
#2148601 - 10/04/17 03:36 PM Re: Joint intent for business owners Compliance Nut
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 9,086
OK
No.....if at the time of application, someone volunteers (not because you are requiring it) to be a guarantor, then you need joint intent. If you REQUIRE guarantors and someone says "i'll be a guarantor", you don't need joint intent because you REQUIRED a guarantor.

(Not trying to speak for David....he can clarify if he wants to.)
_________________________
I'm fixin' to fix that.

Return to Top
#2148701 - 10/04/17 07:47 PM Re: Joint intent for business owners Compliance Nut
Compliance Nut Offline
100 Club
Joined: Feb 2016
Posts: 196
Ok - I follow you now. So, if a person volunteers their guarantee at the time of application, then you must obtain intent to apply jointly because the person is applying contemporaneously with the applicant, thus making that person an applicant themselves. Whereas, if a guarantor is needed later and a person offers their guarantee, joint intent is not required because they are being required to guarantee the loan, not APPLYING to guarantee the loan.

Return to Top
#2148723 - 10/04/17 08:24 PM Re: Joint intent for business owners Compliance Nut
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 9,086
OK
Yep, you got it.
_________________________
I'm fixin' to fix that.

Return to Top
#2148761 - 10/05/17 01:10 AM Re: Joint intent for business owners Compliance Nut
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Exactly!
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top

Moderator:  Andy_Z