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#25286 - 07/25/02 01:43 PM Texas Reg B question for Andy Z and anyone else

I am confused as to how Reg B and Texas community property rules work together. If you have a married applicant in Texas applying for individual unsecured credit, is it permissible to order a credit report on the non-applicant spouse? Reg B seems to imply that you can (202.5(c)(iv)). However, it appears you cannot consider the non-applicant's income in evaluating the credit (since it is sole management community property). Should the debts of the non-applicant be considered in the evaluation of the credit, if the income of the non-applicant cannot be considered? Am I off base here?

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#25287 - 07/25/02 02:37 PM Re: Texas Reg B question for Andy Z and anyone else
Andy_Z Offline
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In a general sense, the single applicant may have liability on all the debt, certainly all that showing on that applicant's credit report (assume it is correct). Can that debt be serviced by that applicant's income? Usually not. And since unearned or projected income of the non-borrowing spouse is not yet community property, you don't assume those funds will be available to service the debt requested.

If the non-borrowing spouse will receive benefit of the loan (and in some cases, not, based on the courts) they may have liability on the loan requested.

There is a lot of gray here and legal interpretation. If you look in the Texas forum and search on Cockerham, you'll see where we had a lively debate on this. Zaibatsu, rlcarey and Anonymoose were all involved and have some pretty good cites.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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