Answer:
Answer by Andy Zavoina:
It is cleanest to get the data each time you need it. This goes beyond the race and sex. This is especially the case as we go into 2004 and the categories of information are changing.
Most credit decisions call for "an application", based on internal policy and safe and sound lending practices. Depending on an old application that is not updated is a bad practice in my opinion, for many reasons. However, you may find it convenient to re-use an application. Copy it and allow the customer to review the content. Now you have an app for each loan.
If you re-use an application, have it initialed and re-dated for the subsequent use. This demonstrates an affirmation that the information is true and correct. I would be hesitant to do this over and over.
If you re-use an application, don't re-use one with government monitoring information for a new loan request where GMI is not allowed.
If it is a renewal, the commentary to 202.13(a) tells you that you do not have to collect it again on a refi.
Answer:
Answer by Lucy Griffin:
I agree with Andy's advice. While re-use of existing applications is permissible, documentation of the new application becomes critical. You need to be able to establish when the application was made and what amount and type of credit it was for. This is increasingly important under new HMDA reporting, and also with concerns about fair lending and predatory lending. If you re-use a prior application, establish a procedure to document the fact of the new credit request.
First published on BankersOnline.com 8/18/03
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