Certified Regulatory Compliance Manager (CRCM) — Question 139

Hector Martinez is a loan officer in a non-community property state. He receives a verbal request for a small business working capital loan from Leon Rogers for his technology consulting business. The business is a sole proprietorship. Mr. Rogers gives Hector a written business plan for his business, a financial statement for the business for the past two years, and a personal financial statement that includes information on himself and his wife. Can Hector assume that the application is a joint application from Mr. Rogers and his wife?

Answer options

• A. Yes. Because the financial statement is signed by both Mr. and Mrs. Rogers and includes joint information, the application can be considered to be from both spouses.
• B. Yes. Because the business is a sole proprietorship, the spouse's financial information is important.
• C. No. The bank cannot assume the application is a joint one simply on the basis of submission of joint financial information.
• D. No. Because the business is a sole proprietorship, the bank should assume the application is for individual credit.

Correct answer: C

Explanation

The correct answer is C because the presence of joint financial information alone does not mean the application should be treated as joint; it must be expressly stated. Options A and B incorrectly assume that joint information always indicates a joint application, while D misinterprets the implications of a sole proprietorship regarding credit applications.