This story appeared in Bank Digest.
The Consumer Financial Protection Bureau has filed an amicus brief in the case of Regions Bank v. Legal Outsource PA, et al. This case involves claims under the Equal Credit Opportunity Act against a bank that allegedly required a business owner's spouse to guaranty a loan to the business because the business owner was married. The Bureau's amicus brief argued that the district court erred in rejecting claims by the business and various guarantors of the loan.
First, the brief argued that a business entity can state a claim for ECOA discrimination based on its owner's marital status. Second, the brief argued that regulations issued pursuant to ECOA reasonably interpret the term "applicant" to encompass guarantors such that non-borrowers who are required to guarantee their spouses' loans can state claims for marital-status discrimination.