Reg B & Business Loans

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Question:

Does a Reg B joint credit apply only to individuals applying for a loan or does it also apply to businesses? We have talked with banks that are utilizing Reg B on business loans if two or more individuals are guaranteeing the loan or if the loan is to an individual and a business. It is my understanding that Reg B joint credit applies only when two or more individuals are applying for credit for either a consumer loan or a business loan. Is this correct?

Answer:

Answer by Dan Persfull: The definition of person in Section 202.2: (x) Person means a natural person, corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association. The joint intent is required for all credit requests.

Answer:

Answer by David Dickinson: The definition of applicant in Reg B Section 202.2: (e) Applicant means any person who requests or who has received an extension of credit from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit. For purposes of Section 202.7(d), the term includes guarantors, sureties, endorsers, and similar parties.

First published on BankersOnline.com 11/10/08