There is still a misconception out there among some lenders that Regulation B (The Equal Credit Opportunity Act) and fair lending in general do not apply to commercial borrowers or loans. Hopefully, your commercial lenders know better. One way that Regulation B seeks to promote fair lending is having a lender nail down who the applicants are and that they are intending to apply for joint credit at the time of application. This can be more challenging on the commercial side because often there is no application form, just tax returns, financial statements or other types of documentation. But this is exactly why joint intent was created. Just because someone submits a joint financial statement doesn’t mean that both of those parties want to apply for a loan.
Kevin explains more in the video.
Video Highlights:
- Joint intent must be documented at the time of the initial credit request.
- Evidence of the applicants’ joint intent can range from signatures on a credit application, initials on a joint intent form, loan officer notes, etc.
- Submission of financial statements is generally not enough to demonstrate joint intent.
Published
2024/02/15
