In its first decision since the death of Justice Antonin Scalia, an equally-divided United States Supreme Court affirmed the lower court decision in Hawkins v. Community Bank of Raymore, 761 F.3d 937 (8th Cir. 2014). In Hawkins, the United States Court of Appeals for the Eighth Circuit held that a spouse, who was a co-guarantor of a loan given to her husband by the defendant bank, could not maintain a claim against the defendant bank under the Equal Opportunity Credit Act, 15 U.S.C. § 1691 (“ECOA”). Specifically, the Eighth Circuit found that a co-guarantor of a loan does not qualify as an “applicant” under ECOA and, as a result, does not have standing to pursue a claim in her own right under the statute.
The Eighth Circuit’s decision is at variance with other courts that have ruled on the issue. Most recently, the Sixth Circuit held that ECOA did extend protection to guarantors. Relying on the regulatory definition of “applicant” promulgated by the Federal Reserve Bank, 12 C.F.R. § 202(e), the Sixth Circuit joined the Third and First Circuits as recognizing a broader definition of “applicant” for the purposes of determining whether a guarantor can proceed with a claim under ECOA.
While the United States Supreme Court affirmed the decision in Hawkins, the single sentence opinion of the divided court has no precedential value and does not resolve what has become a growing circuit split over which parties have standing to pursue a claim under ECOA.