Do guarantors have to sign a statement of joint intent?

Compliance > Regulation B - ECOA
Q:  Do guarantors have to sign a statement of joint intent?


A:  While Regulation B (1002.2 – Definitions) refers to an “applicant” as a person who requests or who has received an extension of credit, and includes any person who is or may become contractually liable, such as a guarantor; this question is more clearly addressed in another section of the regulation (1002.7(d) – Signature of spouse or other person). 
 
Within 1002.7(d), the staff interpretations states that a person’s intent to be a joint applicant must be evidenced.  Further, it clarifies that a joint applicant is someone who applies for the loan simultaneously with the applicant for shared creditThey are not people who agreed to become a guarantor (or similar party) on the loan after the application was submitted because the original applicant did not qualify for the loan on their own
 
In consideration of this:
 
  • 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, joint intent would be required for the guarantor.

This is supported by the Regulation B, official staff interpretations, as are excerpted below.
 
“Official Interpretation
7(d) Signature of spouse or other person.
2. Joint applicant. The term “joint applicant” refers to someone who applies contemporaneously with the applicant for shared or joint credit. It does not refer to someone whose signature is required by the creditor as a condition for granting the credit requested.
 
3. 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.”
 
 

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