[Alma Arriaga]

on a joint application, Reg-B requires that we have “evidence” of “each” applicant’s intent to apply jointly. Does the regulation require that this be either in the form of customer’s initials or a signature? I’m asking because:

For consumer loans – we have a team of telephone bankers that take the application by phone and we retain an “electronic” application. Are we required to have them “evidence” their joint intent in writing? We don’t get a paper application for all loan products.

For commercial loans – our loan officer meets with the customers in person and when they have sufficient information to meet our definition of a complete application, they go back to the office and enter the co-borrower structure in the computer and the joint intent on to the loan origination system — no initials or written application.

Just want to confirm that in all cases, we should be getting some type of signature or initials from “each” applicant? and if so, can we take an application in person or by phone and “mail” something for them to initial to document or evidence their joint intent?

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[jholzknecht]

Well if you didn’t know it before, you know it now, the joint intent rules in Regulation B are screwed up.

The ONLY option for obtaining evidence of intent is to obtain the customers signature or initials at the time of application (application, not completed application), which is doable in a face-to-face application when both applicants are present. In any other situation, including each of the situations mentioned in your questions, the guidance in the regulation does not work.

What we have advised banks for years is to develop reasonable written procedures for each situation and then rigidly follow your own procedures. For example on an electronic application include the model “intent” language and require each applicant to provide an electronic signature in conjunction with the disclosure. For your commercial loans provide your loan officer with printed “intent” forms and have then sign at the time of the face-to-face meeting.

If an examiner challenges your procedures then ask him/her to provide you with the citation for the appropriate procedure from the regulation. Since there are no alternate procedures in the regulation your examiner should drop their challenge.

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