If you have 2 borrowers on a line of credit (heloc, personal line, or overdraft), do you allow either one to terminate the line and close the account (without obtaining the consent of the other) so long as it is paid off?

An earlier post asked the question, "should a lender get a signed document to close a HELOC?". We currently require the signature of all borrowers in order to close a HELOC for the reason you are questioning. Legally, not regulatory, you could probably get by with just one person authorization, however, we ran into a scenario between two spouses getting divorced where one had closed the line and the other had wrote drafts to cover legal expenses. Since the one writing drafts did not know the line had been closed, we faced lender liability issues by not paying the HELOC drafts when they were presented.

Since then, we include language in our early disclosures that tells borrowers that they must both sign a document, authorizing the closing of a HELOC.

If interested, I could send you a copy of the authorization form that we use.