Does joint intent apply to guarantors?
If the guarantor did apply with the applicant for shared or joint credit, joint intent would be required for the guarantor.
Does Reg B apply to guarantors?
While there are no protections for guarantors under Regulation B or the ECOA in the Eight and Eleventh Circuit states, this does not mean your credit union should require a spouse, specifically, to guarantee a loan.
What regulation is joint intent?
The regulation defines the “Who” as any person or entity. That means if two or more persons apply jointly, joint intent is required. It also means that if a person and a business apply for credit, then joint intent applies; as well as when two or more business entities apply.
What does joint intent mean?
A person’s joint intent must be documented at the time of application by having both individuals sign or initial a statement affirming their intent to apply for joint credit. For instance, a male has an ownership interest in a company; however, his spouse does not.
Does Reg B apply to entities?
The Equal Credit Opportunity Act and Regulation B apply to all credit – commercial as well as personal – without regard to the nature or type of the credit or the creditor, except for an entity excluded from coverage of this part (but not the Act) by section 1029 of the Consumer Financial Protection Act of 2010 (12 …
Is a joint applicant the same as a cosigner?
Co-borrowers are the two (or more) people that apply for a joint loan. They share equal payment, credit, and ownership responsibilities. Cosigners, on the other hand, are people who use their own credit to support the loan terms for someone else.
What is covered by Reg B?
Regulation B covers the actions of a creditor before, during, and after a credit transaction. This list also includes refinancing, credit applications, information requirements, standards of creditworthiness, investigation procedures, and revocation or termination of credit.
What does Reg B apply to?
Understanding Regulation B (Reg B) Regulation B covers the actions of a creditor before, during, and after a credit transaction. The CFPB lists credit transactions and aspects of credit transactions to include consumer credit, business credit, mortgage, and open-end credit.
Does Reg B only apply to consumers?
3601 et seq., unlike ECOA, is not a “Federal consumer financial law” as defined by the Dodd-Frank Act for which the CFPB has supervisory authority. Regulation B applies to all persons who, in the ordinary course of business, regularly participate in the credit decision, including setting the terms of the credit.
What is the difference between a guarantor and a co-borrower?
Another important distinction to remember is that a co-borrower is primarily liable for the debt from its inception. In contrast, a guarantor is not liable unless the underlying borrower defaults and, depending on the terms of the guaranty, the lender pursues collection efforts against the borrower.
What’s the difference between co-applicant and guarantor?
A co-applicant is an additional applicant involved in the loan underwriting and approval process for a single loan. A co-applicant differs from a co-signer or guarantor in terms of their rights associated with the loan. A co-signer may be used to help a primary applicant receive more favorable loan terms.
Is joint intent required for a guarantor to grant credit?
If the guarantor did not apply with the applicant, and the requirement of a guarantor is a condition that the creditor requires to grant credit, evidence of joint intent would not be required for the guarantor. If the guarantor did apply with the applicant for shared or joint credit,…
Do guarantors have to sign the statement of intent?
We have a corporation/LLC that is the borrower and individuals signing guaranty agreements. Do the guarantors have to sign the statement of intent to apply for joint credit? Under Reg B guarantors are applicants. See 202.2 (e). If they apply as guarantors at the same time the LLC applied, then yes the joint intent is needed.
What is regulation b-joint intent (regulation B)?
Be sure to JOIN US on May 5, 2020, for our webinar, “Regulation B-Joint Intent”. Regulation B prohibits lenders from requiring anyone to sign any kind of liability document unless they’re applying but you can make people sign security documents. So, who can you make sign what?
Is it a better practice to just obtain the joint intent?
No, it is not a better practice to just obtain the joint intent. The joint intent is required when joint applicants contemporaneous apply for credit.