Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
If an individual and his personal trust co-apply for a loan, do we need to require a statement of joint intent? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

If an individual and his personal trust co-apply for a loan, do we need to require a statement of joint intent?

—

by

Yes, we believe that you should require a statement of joint intent in this situation.

The Official Interpretations to Regulation B state that “a person’s intent to be a joint applicant must be evidenced at the time of application.” An “applicant” is any person who has requested an extension of credit. A “person” includes (among other things) both individuals and trusts. Consequently, if an individual and a trust co-apply for a loan, they must evidence their intent to be co-applicants (i.e., through a statement of joint intent). We are not aware of any exception to this requirement when a trust and the trust’s beneficiary co-apply for a loan.

For resources related to our guidance, please see:

  • Regulation B, 12 CFR 1002.7(d)(1) (“Except as provided in this paragraph, a creditor shall not require the signature of an applicant's spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit requested. . . .”)

  • Official Interpretations, Regulation B, 12 CFR 1002, Paragraph 7(d)(1), Comment 3 (“A person's intent to be a joint applicant must be evidenced at the time of application. . . .”)

  • Regulation B, 12 CFR 1002.2(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 § 1002.7(d), the term includes guarantors, sureties, endorsers, and similar parties.”)

  • Regulation B, 12 CFR 1002.2(x) (“Person means a natural person, corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.”)