[Anonymous]

Does the Individual Intent Box need to be checked on a Commercial Loan Application if the borrower is a business entity? I have also been told that if there are multiple borrowers (business entities) that the joint box should be checked. We have not been checking the Intent Box (Individual or Joint) on any commercial loan applications where our borrowers are business entities and have made it through several audits without it being mentioned or made an issue. We do check the Intent Boxes if our commercial borrowers are individuals. We are looking for guidance to make sure we are doing it properly. Thank you.

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[rcooper]

Reg B 1002.7(d)(1)-3 says: “A person’s intent to be a joint applicant must be evidenced at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. On the other hand, signatures or initials on a credit application affirming applicants’ intent to apply for joint credit may be used to establish intent to apply for joint credit. (See Appendix B.) The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit.”

Applicant is defined as 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.

Person means a natural person, corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.

It sounds like in your situation you have two “persons” that are “applicants” applying jointly so you would need that intent to apply jointly.

There are other situations that are a little tricky. For example, if you have a business and the bank requires an officer to be a guarantor after the application is received that is not a joint application and you wouldn’t need to document joint intent. However, if a guarantor decides to apply as guarantor at the time of application by the borrower then that would be considered joint intent.

Just remember to look to the requirement in 1002.7(d) and then to the definitions of applicant and person and that should help.

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