Industry Standard for Documenting Joint Apps

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Question:

Reg B and Intent to Apply for Joint Credit Question. Thank you for the wonderful clarification with the article on Reg B Roundup. Our team and attorneys have discussed at length the best way to establish a person's intent to become jointly liable for a credit obligation at the time of application. This regulation change impacts products differently based on the product process but I’m particularly interested in understanding what other lenders are planning to do to satisfy this change when taking applications over the phone or internet. We are checking with other industry contacts. Do you have any more specific guidance on phone applications for consumer finance (Auto, unsecured)?

Answer:

Telephone and Internet applications are becoming increasingly common. As such, examiners are paying more attention to them. It is clearly not an excuse for poor documentation to say that the application came in over the phone. Quite the opposite.

Internet applications are self-documenting, so to speak. However the applicant filled out the application form determines whether you have a joint or individual applicant.

For telephone applications, training and procedures are critical. I would suggest using a check sheet for loan officers to remind them to ask all the questions -- such as "are you applying for individual or joint credit?" and those wonderful questions about monitoring data. The check sheet can go into the loan file, with all the boxes checked as a way of showing that the loan officer did indeed ask the questions. Answers, of course, are up to the applicant.

First published on BankersOnline.com 2/09/04