Answer by Andy Zavoina:
Section 202.2(f) Application means an oral or written request for an extension of credit that is made in accordance with procedures established by a creditor for the type of credit requested.
You can make your application whatever you want. Your housekeeping recommendations are certainly cleaner, but are not a requirement. I would note that a lack of requesting all income concerns me if you deny applicants for a lack of income and either didn't request it or didn't disclose that it need not be added to the income stated.
There is no signature requirement, but it is helpful. And a short disclaimer that additional applicants should complete their own application would also be of assistance. So long as you have a business reason, you can access a credit report without a written authorization.
Answer by Mary Beth Guard:
Having a good written application form is desirable for a number of reasons. It helps document who the true applicants were (so you can show a permissible purpose for pulling their credit reports and can determine if someone should be given a co-signer's notice if they aren't a co-applicant, but will be liable on the note as a co-signer). It provides written evidence of fraud in the event the applicant provides false information regarding his assets/liabilities. It also helps document that the applicant has given you permission to obtain information about them from other financial institutions, which is important for privacy rule purposes.
In addition, if the loan is for the type of credit covered by Section 202.13(a), Section 202.5(e) requires a written application. As Andy correctly notes, a written app is not required in other circumstances, but it can certainly provide important information and protections for your institution.
First published on BankersOnline.com 12/2/02