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Question of the Week

  • QUESTION: For a business application for credit, may the bank assume an application is for joint credit if the financial statement lists jointly held property by the husband and wife is signed by both spouses?


    A creditor must 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. A creditor must not deem the submission of a joint financial statement or other evidence of jointly held assets as an application for joint credit. 

    Evidence of joint application. 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. 

    Reference: 12 CFR 1002.7(d)(1); Official Staff Interpretation 1002.7(d), comment 3.