Questions and Answers
Regarding checking Overdraft Lines of Credit, if a consumer checking account is set-up jointly, are both parties required to apply for and sign the documentation for the Overdraft Line of Credit or can only one of the owners apply for and sign the Overdraft Line of Credit documents.
We are not familiar with any overdraft account/line of credit specific rules that would regulate the number of signatures on the overdraft line of credit agreement. However, from a practical standpoint, it would seem that if the line of credit can be accessed by a joint checking account, you would want all owners of the joint checking account to sign on the line of credit. From a risk management standpoint, this type of practice would certainly put you in a better position in the event of default. Ultimately, it appears that the decision whether to require the signatures of both accountholders is a matter of your institution’s policies in this area.
(Posted: 05/03/2008)
