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Abstract: 

Consumer and commercial lenders face increasing litigation and regulatory inquiries over spousal guarantees secured in violation of the Equal Credit Opportunity Act (ECOA), including claims for damages and attempts to avoid both the guarantees and the underlying debt itself. To help creditors navigate these claims, the authors examine ECOA and its implementing regulations and survey hot litigation topics concerning spousal guarantees—a guarantor’s ability to assert and rely upon ECOA as an “applicant” for a loan; guarantors’ use of ECOA as a defense to claims by lenders under a guarantee; and whether a defensive assertion of ECOA is permissible after the statute of limitations has expired on any affirmative claim under the statute. Last, the authors provide practical tips to lenders to ensure ECOA compliance.

Keywords: ECOA; Equal Credit Opportunity Act; Regulation B; spousal guarantee; joint applicant; ECOA litigation, ECOA damages; statute of limitation

Affiliations:  1: Stradley Ronon Stevens & Young, LLP; 2: Stradley Ronon Stevens & Young, LLP; 3: Stradley Ronon Stevens & Young, LLP.