Skip to content
BOL Conferences Top Gun 23
Thread Options
#2232738 - 03/10/20 08:34 PM Joint Intent Form on Commercial Loans
leigh6 Offline
New Poster
Joined: Dec 2019
Posts: 3
We have a situation where our loan department is citing exceptions for missing the Intent to Apply for Joint Credit form. Several of us have come from prior commercial banks and never needed this form for commercial loans. In looking at the Reg, it says something about "at the time of application", which in almost all cases, there is not an application for commericial loans. The lender gets financials, does a write-up, it goes through loan committee for approval, and then documentation. When would we have this form signed? And is it in every case where two businesses are co-borrowers?

What about guarantors? Do they need to sign as well?

Any help/advice would be appreciate.
Thanks!

Return to Top
Lending Compliance
#2232739 - 03/10/20 08:38 PM Re: Joint Intent Form on Commercial Loans leigh6
Tater Offline
Platinum Poster
Joined: Jan 2006
Posts: 631
Missouri
If there's no application, how do you know when to start the process of collecting financials? How do you know what to present to committee?

For a lot of shops, an application can be as little as a verbal request. Some places even allow the joint intent to be verbal, subject to policy/procedure/state law restrictions.
_________________________
Born once? Die twice.
Born twice? DIE ONCE!

Loan Review, HMDA, ALLL

Opinions are my own and do not reflect any others

Return to Top
#2232761 - 03/11/20 02:59 PM Re: Joint Intent Form on Commercial Loans leigh6
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,016
Bloomington, IN
You commercial lending staff may want to review the definition of an application in Reg. B 1002.2(f) and its accompanying Official Staff Interpretations.

(f) Application means an oral or written request for an extension of credit that is made in accordance with procedures used by a creditor for the type of credit requested. . . . . .

They will also find the definition of an applicant and a person in Reg. B 1002.2. For the purposes of Reg. B a corporation is a person and the joint intent would apply if 2 or more corporations are applying for joint credit.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2232792 - 03/11/20 05:19 PM Re: Joint Intent Form on Commercial Loans leigh6
Inherent_Risk Offline
Gold Star
Joined: Jan 2017
Posts: 429
The joint intent provisions would also apply to guarantors.

Return to Top
#2232796 - 03/11/20 05:25 PM Re: Joint Intent Form on Commercial Loans leigh6
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
With one caveat in which it is not required for guarantors:

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.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2233669 - 03/25/20 07:28 PM Re: Joint Intent Form on Commercial Loans leigh6
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
In the situation for a commercial loan request where the actual borrowers have not yet been determined as they will be corporate entities that have not yet been created, would it be appropriate to indicate there is no application or joint intent until the corporate borrowers are determined? The lender will be gathering information and working on approvals, etc. but says they don't yet know what the name of the borrowers will be to indicate who is applying jointly and their loan approval form will read "Borrowers TBD". It would seem that they have an application, but who would be indicated as the joint applicants?

Thank you!

Return to Top

Moderator:  Andy_Z