Supreme Court Divided in Hawkins on Whether 'Guarantor' is an 'Applicant' Under ECOA

In the first of what may be many 4-4 split decisions following the death of Justice Antonin Scalia, the U.S. Supreme Court issued its opinion in Hawkins v. Community Bank of Raymore, No. 14-520, leaving in place the Eighth Circuit's ruling that the Equal Credit Opportunity Act's ("ECOA") prohibition against marital status discrimination applies to loan applicants, but does not extend to loan guarantors.

Hawkins raised the question of whether ECOA's proscription against discrimination based upon marital status applied to two wives who were required to guarantee their husbands' business loans. Specifically, Valerie Hawkins and Janice Patterson claimed that Community Bank of Raymore violated ECOA by requiring them to execute personal guaranties of their respective husband's business loans and that doing so constituted discrimination based upon marital status.

The District Court granted summary judgment for the Bank, finding that Ms. Hawkins and Ms. Patterson were not "applicants" as that term is defined by ECOA and, as such, the Bank had not violated ECOA. Acknowledging that the Sixth Circuit had reached a contrary conclusion in RL BB Acquisition, LLC v. Bridgemill Commons Dev. Grp., 754 F.3d 380 (6th Cir. 2014), the Eighth Circuit, nonetheless, affirmed the trial court's ruling, having determined that a...