Does anyone know if there is a legal requirement that consumer applications have to be signed if the loan is approved?

No regulatory requirement for the applicant's signature.

It's a matter of policy and our policy requires that a "signed" application accompany all consumer loan requests.

There may be state requirements similar to Vermont where you need to have authorization to pull credit reports. In some institutions, that authorization is provided on the loan application only.

Like so many things, it isn't a regulatory requirement but is a good thing to do. It provides proof of the request, a good audit trail, and a "correct to the best of my knowledge" statement to help avoid fraud. When I was doing collections, I had a borrower immediately file Ch. 13 after the loan. It was determined there was no fraud because we took the app over the phone and didn't require that he sign it.

Remember that Reg. B doesn't even require applications to be written unless GMI is involved.

Does Vermont law require a "written" consent to pull a credit report? It is just indicated above as "consent".

Andy is right In many states right above the signature line are a lot of words in very small print. If they are on your banks application read them.

They usually consent to the pulling of a credit report and words to the effect that the applicant didn't lie about what they put on the app, and the bank is relying on the accuracy of the information. It gives the bank recourse if the applicant was less than truthful.

Is it a legal requirement to have the app signed? IMO no, but you give up a lot of legal recourse if it isn't. It is a normal bank POLICY to require applications be signed. It can also be an audit exception on internal loan reviews.

My issue is with commercial lending, for the most part, who don't complete or require an application, much less a signature. FCRA indicates that a signature is not required if you have a permissible purpose to pull the report, but my confusion is in state law. If we have an commerical applicant, who's residence is in a state that requires written authorization, but we do not actually operate in that state, do we not still have to get written authorization? I'm no lawyer. I do good to know my own state's law, much less 49 others.

Not so simple, Anonymous. The FTC Tatelbaum2 opinion says that it is "reasonable to view a business transaction in which an individual HAS accepted personal liability for the business debt as involving the consumer ...".

If the application is withdrawn or declined, the individual does not accept personal liability. We will not pull personal credit on a new deal until we get a signed Personal Financial Statement which includes specific authorization to pull personal credit.

Renewals are not a problem.

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Renewals are not a problem.

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Tell that to the Note Department at Month end/Quarter end!!!