Regarding indirect auto lending, we receive applications from the dealer porter that indicate applicants are "spouses" but in some situations the two individuals have different last names and/or reside at different addresses. Can we inquiry into the reasoning for this? Or must we take this at face value? If the application is submitted as a "joint" application, all that matters is that the applicants are creditworthy, right - regardless of marital status?

Found this information on the CFPB website:
"A lender or dealer may consider your marital status as it affects the lender’s ability to reach the property in the event of nonpayment. For example, for auto loans, a lender or dealer could consider whether your spouse has an interest in the property that is being offered as collateral for the loan."

It was my understanding that marital status can not be considered for lending purposes (as this is prohibited under Reg. B), but it can be considered for a potential event of nonpayment? Please help me understand this.

You can ask if an applicant is married, unmarried, and separated on secured credit. You can only ask who they are married too if one of the conditions of 1002.5(c)(2) exists..

You need information for two purposes:
1. to determine if the applicant(s) meet your standard of creditworthiness, and
2. to perfect a lien on the collateral.

The general rule (Section 1002.5(a)(1)) is that you can ask anything you want "in connection with the credit transaction" (EXCEPT information that is restricted or prohibited by the remainder of Section 1002.5.)

I don't see a connection between the proposed credit transaction and the applicants' "reasoning" for the names they use or their places of residence. If there's no credit-related or collateral-related reason to ask or know these things, then why do you want to waste time on extraneous information? (I assume, of course, that the dealer has obtained driver's licenses or other valid ID to establish legal names and addresses, and otherwise guard against loan fraud.)