One of my bank's consumer credit applications (which is used for small closed-end second mortgages and unsecured loans) has a separate section where applicant(s) may check 1 of 2 boxes to establish if they intend to apply as individual or joint. In fact, this is the first question at the top of our application.

My 3 compliance questions regarding this are:
1) Must this area be initialed or signed too? (I thought this was optional for many years, but maybe things have changed).
2) Does the answer to question #1 depend on whether an application is for secured credit or unsecured credit?
3) What do we do if an applicant does not check either box when they submit their initial application?

3. Evidence of joint application. A person's intent to be a joint applicant must be evidenced at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. On the other hand, signatures or initials on a credit application affirming applicants' intent to apply for joint credit may be used to establish intent to apply for joint credit. (See Appendix B.) The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit.


1. Initials are preferable but the regulation does not actually require them. They are preferable to eliminate any doubt the applicant(s) did indeed indicate their intent and the boxes were not just checked by the loan officer. They are also preferable due to the model forms in Appendix B.

As a matter of policy we require the intent to be evidenced by initials or signature.

2. No.

3. The loan officer the application is assigned to needs to contact the applicant to establish their intent.

I agree with everything Dan stated. Here's a memo from the KC FRB on this topic dated 6/30/2010. A very similar memo (almost verbatim) was issued in Jan 2018.


Subject: 2Q2010 Fed Connections message: Observations on Signature Rules

This email is directed to the compliance officers of banks supervised by the Federal Reserve Bank of Kansas City that participate in our Fed Connections Consumer Compliance Outreach program. Through that program, we provide timely communications regarding consumer compliance hot topics that we think warrant increased attention. For this second quarter of 2010, we offer these observations regarding the signature rule requirements of Federal Reserve Regulation B, 12 CFR 202.7(d). 

In the last few months, our compliance examiners have observed situations in which a bank's procedures for obtaining signatures on loans did not fully conform with 12 CFR 202.7(d) or which could present fair lending issues. These procedures are relatively easy to bring into compliance, while the potential penalties for not doing so can be quite significant. The information below should assist you with complying with the applicable signature policy requirements.


Regulation - According to Regulation B, 12 CFR 202.7(d), a creditor:
• shall not require the signature of an applicant's spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit requested.

• cannot ask for or require the signature of an applicant's spouse or any other party on a credit instrument if the applicant asks for individual credit and the applicant meets the creditor's lending standards of creditworthiness.

• may request a cosigner or guarantor on a loan if the applicant does not meet the creditor's creditworthiness standards, but the creditor cannot require the cosigner or guarantor to be the applicant's spouse.

• must determine a person's intent to be a joint applicant at the time of application for the credit.


These rules ensure that qualified applicants may obtain credit in their own name, which is important to their ability to establish a credit history and access other credit. 


Issue - The signature requirements of Regulation B apply both to consumer credit and to signer/guarantors on commercial and agriculture loans. Examiners are finding spousal signatures on loans for which documentation of the signing parties' intentions regarding individual or joint credit is not adequate. For example, files do not contain an application signed by both parties or other documentation of the signors' intentions, yet the signatures obtained are those of spouses. At best, this is a documentation issue in which banks are not, in fact, requiring spousal signatures and for which examiners may cite a technical, rather than a discriminatory, violation of Regulation B. At worst, the signatures may indicate that a bank is illegally requiring spousal signatures, which is discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B and may create a situation in which a bank regulator is obligated to refer the situation to the Department of Justice for investigation. 



How to comply - You have some options on how to determine a person's intent to be a joint applicant. Remember that the determination must be made at the time of the application for credit, or "contemporaneously", whether that application is in writing or verbal. Additionally, regardless of your method of determination, it is important that the determination is documented in the credit file. Your first option is to use written applications. Written applications with the applicants' signatures are strong evidence of joint intent. They become even stronger if, in addition to both signatures, the application form has a separate disclosure on which the applicants may overtly affirm their intention for joint credit. 



In the absence of written applications, the second option is to simply provide the applicants, at time of application, with a joint intent disclosure on which they may indicate their intention to apply for joint credit. Finally, absent written applications or applicant acknowledgement on other joint intent disclosures, the loan officer may simply ask the applicants about their intentions.
The loan officer may then document that via a note to the credit file. Having that note dated would help document that the intentions were determined contemporaneously with the application for the credit. 



Permissible signature requirements - The following situations describe when you may require certain signatures:
• If you determine that an application for credit is a joint application of two or more people, you may require the signatures of the joint applicants on the credit instrument.

• If you determine that an application is for individual credit, but you require collateral to meet your underwriting standards, you may require the signature of a spouse or other person on the documents necessary under state law to give you access to the collateral in the event of default.

• If you determine that an application is for individual, unsecured credit and the applicant meets your standards for creditworthiness, you may not require additional signatures on the credit instrument.

• If you determine that an application is for individual, unsecured credit, and the applicant does not meet your standards for creditworthiness, you may require a qualified cosigner or guarantor, but you may not require that cosigner or guarantor be the applicant's spouse. Additionally, if the applicant for unsecured credit relies in part on property the that applicant owns with another person to satisfy your standards for creditworthiness, you may require the signature of the other person only on instruments necessary under state law that would allow you to reach the property in the event of death or default of the applicant.

• If your applicant is married and resides in a community property state, or if the applicant is relying on property located in such a state, you may require the spouse's signature, in certain circumstances, on any instrument necessary under state law to make the property available to satisfy the debt in the event of default.


What won't work - Here are some examples of methods that will not comply with the signature rules: 

• Financial statements - Applicant signatures on financial statements that only attest to the accuracy of the financial information are not acceptable evidence of intent to apply for joint credit. Financial statements that also contain a separate disclosure regarding intention and that the applicants must separately sign or initial indicating their intent, are acceptable evidence, as long as those intentions are determined at the time of the application.

• Signatures on credit instruments - Absent any other documentation of intent, the fact that someone signs a promissory note is not evidence that they intended to apply for the credit, particularly if they are the spouse of the other signor, for their signature could have been illegally obtained.


If you have questions about the signature rules, please contact the examiner assigned to your bank. For 10th District state member banks, that examiner is identified in the cover letter to your last consumer compliance report of examination. 

Information about our third quarter Fed Connections communication will be forthcoming in August. Thank you for participating in

Fed Connections!



Joint intent references:
• Regulation B, 12 CFR 202.7(d)
• Regulation B, Official Staff Interpretations

Dan and David, I appreciate the detailed responses. Thank you!