Regulation on Who Can Deny Credit

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Question:

Are there any specific regulations that state who would have the authority within a financial institution who can deny credit? Should that individual have the lending authority to approve what credit is being denied? Ex. customer service rep denies credit applications but that customer service rep has NO lending authority.

Answer:

Persons that can approve or deny credit are designated by the financial institution's senior management based on the person's qualifications and experience.

If the CSR has been granted no lending authority by senior management then they should have no authority to approve or deny credit. You need to investigate what type of authority has been "formally" given to this CSR.

If they have no authority then you may very well have fair lending issues to deal with.

First published on BankersOnline.com 11/12/12