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#418263 - 09/02/05 05:01 PM Number of times a customer can apply

We have a customer who has applied several times for a loan and has been turned down. The bank sent the appropriate documents for the turn downs. However, the customer repeatedly is tring to get a loan day after day. Does the bank have to allow a customer to continue make application.

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Lending Compliance
#418264 - 09/02/05 05:43 PM Re: Number of times a customer can apply

As long as you are not discouraging an applicant from applying on a prohibited basis, you can refuse to accept their application.

1. Prospective applicants. Generally, the regulation's protections apply only to persons who have requested or received an extension of credit. In keeping with the purpose of the Act --to promote the availability of credit on a nondiscriminatory basis --202.4(b) covers acts or practices directed at prospective applicants that could discourage a reasonable person, on a prohibited basis, from applying for credit. Practices prohibited by this section include:

i. A statement that the applicant should not bother to apply, after the applicant states that he is retired.

ii. The use of words, symbols, models or other forms of communication in advertising that express, imply, or suggest a discriminatory preference or a policy of exclusion in violation of the Act.

iii. The use of interview scripts that discourage applications on a prohibited basis.

Thus, as long as your decision to not allow them to apply is not based on the fact that they are of a particular color, religion, race, etc, the regulation does not prohibit you from denying them the "privilege" of applying.

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#418265 - 09/02/05 06:20 PM Re: Number of times a customer can apply
bgehres Offline
100 Club
Joined: Mar 2005
Posts: 126
Charging an application fee on all applications cleared this issue up for us.

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