Question:

Good Morning Heather,

Let’s say a member with a checking account is applying for an overdraft line of credit (LOC) for that checking account. If the checking account is jointly owned, can we require both owners be liable on the overdraft LOC?

Great Question!

Yes you can. Usually, Reg B prohibits a creditor from requiring a co-applicant if an individual applicant qualifies by themselves, but an overdraft LOC is one time when you can. From the commentary to 12 CFR 1002.7(a):

3. Overdraft authority on transaction accounts. If a transaction account (such as a checking account or NOW account) includes an overdraft line of credit, the creditor may require that all persons authorized to draw on the transaction account assume liability for any overdraft.