Spousal Signature Rules

D

The FDIC (Federal Deposit Insurance Corporation) has issued guidance for financial institutions on the spousal signature rules to ensure compliance with applicable laws and regulations. The spousal signature rules require the signature of both spouses on certain legal documents, such as loan applications, to protect the non-borrowing spouse's rights.

The guidance lists three requirements to ensure compliance with spousal signature rules, which are:

1. Review and revise policies to eliminate policies or procedures that are inconsistent with the requirements and to expand loan policies and procedures to provide loan staff with specific guidance on state law(s) regarding requiring signatures, including the laws of all states where the creditor institution does business, and create checklists to address situations when spousal signatures can be required.

This requirement emphasizes the importance of reviewing and updating existing policies to ensure they comply with the spousal signature rules. It also highlights the need to provide specific guidance to loan staff on state laws and regulations related to spousal signatures, as these can vary by state. The creation of checklists can help ensure consistent application of the rules across the institution.

2. Provide training to consumer and commercial loan staff.

This requirement highlights the importance of providing training to loan staff on spousal signature rules, including the legal requirements and the institution's policies and procedures. By providing training, loan staff can better understand the requirements and the risks associated with noncompliance.

3. Implement monitoring and auditing programs to check for spousal signature violations.

This requirement emphasizes the importance of implementing monitoring and auditing programs to detect and prevent spousal signature violations. By monitoring loan documents and conducting regular audits, financial institutions can identify potential violations and take corrective actions as needed.

Notably, the FDIC guidance does not mention Option D, which reads: "Must allow an applicant to designate a birth-given first name and a birth-given, surname, spouse's surname, or combination." Therefore, Option D is not one of the requirements to ensure compliance with spousal signature rules, as stated in the FDIC guidance.

In summary, financial institutions must review and revise their policies, provide training to loan staff, and implement monitoring and auditing programs to ensure compliance with spousal signature rules. These requirements help to protect the rights of non-borrowing spouses and minimize the risk of legal and reputational harm for financial institutions.