## Facts

- Community Bank of Raymore made four commercial loans totaling more than $2 million to PHC Development, LLC to finance a residential subdivision.
- PHC’s two members were the husbands of Valerie J. Hawkins and Janice A. Patterson.
- As a condition of extending credit to PHC, the bank required Hawkins and Patterson to sign personal guaranties, along with their husbands.
- After PHC defaulted, the bank accelerated the loans and demanded payment from PHC and the guarantors.
- Hawkins and Patterson sued for damages and declaratory relief, alleging the bank required their guaranties solely because of their marital status, in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691 et seq.
- They argued that Regulation B treated spousal guarantors as “applicants” covered by ECOA’s antidiscrimination provisions.
- The district court granted summary judgment for the bank and struck plaintiffs’ jury demand; plaintiffs appealed.

## Issues

1. Whether a person who signs a guaranty for another’s debt qualifies as an “applicant” under ECOA, 15 U.S.C. § 1691a(b).
2. Whether Regulation B can treat guarantors as “applicants” for ECOA coverage when the statutory text is unambiguous.
3. Whether the district court erred in striking plaintiffs’ jury-trial demand.

## Decision

- The Eighth Circuit affirmed summary judgment for the bank.
- The court held guarantors are not “applicants” under ECOA because they do not request credit; they promise to pay another’s debt upon default.
- Because plaintiffs were not “applicants,” ECOA’s marital-status discrimination prohibition did not apply to them, and their ECOA-based claims and defenses failed as a matter of law.
- The court declined to give effect to Regulation B’s broader definition because it conflicted with the statute’s unambiguous text.
- The jury-trial issue was moot given dismissal of the ECOA claims and defenses.

## Legal Principles

- ECOA’s definition of “applicant” in 15 U.S.C. § 1691a(b) covers persons who request credit; executing a guaranty, without more, does not make a person an “applicant.”
- ECOA’s antidiscrimination protections apply only to “applicants”; guarantors outside that definition cannot sue under ECOA or assert ECOA violations to avoid enforcement of their guaranties.
- An agency regulation cannot expand the coverage of a statute that is unambiguous on the question presented; courts owe no deference to a regulatory definition that contradicts clear statutory text.

## Conclusion

The Eighth Circuit held that spousal guarantors are not ECOA “applicants” because they do not apply for credit, and that Regulation B could not extend ECOA protections to guarantors contrary to the statute’s plain language; summary judgment for the bank was therefore affirmed and the jury-demand challenge was moot.


Hawkins v. Cmty. Bank of Raymore, 761 F.3d 937 (8th Cir. 2014)