Circuits Remain Split on Application of ECOA to Spousal Guarantors

Fall 2016The Abstract

Does the Equal Credit Opportunity Act ("ECOA"), which prohibits discrimination on the basis of marital status, prevent lenders from requiring a borrower's spouse to guaranty a loan? The answer depends on whether the guarantor-spouse is an "applicant," as defined in the ECOA, and, because of a split among the Federal Circuit Courts that was left unresolved by a recent U.S. Supreme Court decision, that answer may depend on the venue. In the Eighth Circuit states of Arkansas, Iowa, Minnesota, Missouri, Nebraska, South Dakota, and North Dakota, lenders are currently not prevented from requiring a borrower's spouse to guaranty a loan, but in other states, the answer is unclear.

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