Answer:
Answer by Richard Insley, BOL Guru
My bank defended one many years ago, as follows: AutoDealerInc defaulted on obligations to the bank and we proceeded to sue all those who had signed the guaranty agreementall principals and spouses. Mrs. X counterclaimed marital status discrimination because, allegedly, she was forced to sign the note. The court threw the case out on a technicality and we skated, but additional steps were taken to begin obtaining a signed shortform application form from all commercial applicants and guarantors. All this form did was memorialize the offers of collateral and guarantors so we would be in a position to whip out the signed form as Exhibit A if a similar problem ever arose again.
Answer:
Answer by Mary Beth Guard, BOL Guru
I think it's a safe bet that we will see more of these types of claims in the near future. The recent regulatory guidance relating to spousal guarantees and when spousal signatures can and cannot be obtained under ECOA and Reg B (such as FDIC FIL92002) will not only catch the attention of bankers, but it will also serve as a reminder to banking lawyers of what is permissible and they will be looking for violations when trying to help consumer clients. Now's the time for all lenders to bone up on the law. This flow chart from the Banker Tools section can help.
First published on BankersOnline.com 1/6/03
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