What may a creditor do if an applicant applies for individual unsecured credit?
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A. B. C. D.C
The CRCM (Certified Regulatory Compliance Manager) exam is designed to test the knowledge and understanding of individuals working in the compliance field. The question you have provided pertains to individual unsecured credit and what actions a creditor may take when an applicant applies for it.
Option A states that a creditor may never require the signature of another person. This statement is incorrect. A creditor may require the signature of another person, such as a co-signer or guarantor, if the applicant does not meet the creditor's creditworthiness standards. This provides the creditor with additional assurance that the credit will be repaid in full.
Option B states that a creditor may ask for the signature of the applicant's spouse if the applicant is not creditworthy. This statement is partially correct. A creditor may ask for the signature of the applicant's spouse if the applicant is married and resides in a community property state. This is because the spouse may have an interest in the jointly owned property, and the creditor wants assurance that the spouse will not claim a right to the property in the event of default.
Option C states that a creditor may require another signature if the applicant relies on jointly owned property to establish creditworthiness. This statement is also partially correct. If the applicant relies on jointly owned property to establish creditworthiness, the creditor may require the signature of the joint owner to ensure that the property will not be sold or encumbered without the creditor's consent.
Option D states that a creditor may ask the applicant to withdraw the application if it does not meet the creditor's credit standards. This statement is generally correct. If an applicant does not meet the creditor's creditworthiness standards, the creditor may decline to extend credit to the applicant. However, the creditor is not required to ask the applicant to withdraw the application.
In conclusion, the correct answer to the question is Option C. A creditor may require another signature if the applicant relies on jointly owned property to establish creditworthiness.