Does the Equal Credit Opportunity Act Apply to Spousal Guarantors? The Eleventh Circuit Says No

Trade creditors considering extending credit to a customer sometimes seek a guaranty of the customer’s indebtedness—in many instances, from the customer’s principal and/or the principal’s spouse. The Equal Credit Opportunity Act (“ECOA”) and its coinciding Regulation B grant the customer (i.e., the credit applicant) certain rights and protections, as the ECOA makes it unlawful for “any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction … on the basis of … marital status.” Regulation B, which was adopted by the Federal Reserve Board (“FRB”) to provide guidance with respect to the ECOA, states that an applicant includes a guarantor. However—the FRB’s definition of “applicant” notwithstanding—the courts have grappled over whether guarantors are entitled to the ECOA’s rights and protections, as courts differ with respect to whether guarantors are considered “applicants” under the ECOA and, therefore, whether guarantors have standing to invoke the protections of the ECOA.