Banking Interpretations

Gen. Reg. Part 38

February 20, 2007


Re: Part 38

Dear Mr. [---]:

Your letter, dated October 20, 2006, to the New York State Banking Department (the "Department"), has been referred to me for response. In your letter you asked whether it would suffice for an employee of a mortgage banker or broker, who takes an electronic application or one over the telephone, to print the name of such employee on the application without providing an actual signature.
As you pointed out, the introductory paragraph of §38.3 of the General Regulations of Banking Board ("Part 38") sets forth the manner in which an application may be taken as "in writing, over the telephone or electronically."  Part 38 goes on to provide in §38.3(a)(2)(ii), with regard to mortgage brokers, and §38.3(b)(2)(iv), with regard to mortgage bankers and exempt organizations that every written-application taken by such entity shall be signed by such employee taking the application, and shall include the name and/or title of the employee.
Although Part 38 does not address the need for similar requirements in the case of a telephone or electronic application, I think such requirement is necessary for applications taken over the telephone or electronically for the same reasons it is needed in written applications; Consumer is informed as to the person that took his/her information on the application, and has the contact information of such person that took the application. Neither do I think it is impractical; An employee, after taking an application 1 over the telephone can print and sign his/her name on the application when such application is converted to written form, or type it in if the information is typed onto a computer generated application and sign a printed copy to be sent to the consumer. Similarly, an employee responsible for the processing of an application received electronically can insert his/her name on such application in print form and also sign the document before mailing it to the consumer.

I trust the foregoing is responsive to your inquiry.

Very truly yours,

Harry C. Goberdhan
Assistant Counsel


1 An application should only be taken by an employee of a mortgage broker or banker, or exempt organization at a licensed or registered location.