Ultimately, the court said the critical question was not one of lender policy, but whether the Gentiles were joint applicants.
Although the ECOA was designed to protect women from credit discrimination by requiring that creditors treat all credit applicants the same – male or female, married or single – Congress did not intend for the law to allow permissibly bound debtors to escape contractual liability when called upon to perform, the majority said.
“When determining whether a creditor has violated the ECOA by requiring a spousal signature, it is critical to determine whether the husband and wife were joint applicants on the loan. … Lenders are permitted to require spousal signatures where the spouses are joint applicants.”
A “joint applicant,” the court explained, is someone who applies contemporaneously with the applicant for shared or joint credit, not someone whose signature is required by the creditor as a condition for granting the credit requested.
The majority said the trial court “appears to have relied heavily (if not exclusively) on the existence of a policy to require spousal signatures, without considering the totality of the circumstances surrounding whether the Gentiles were joint applicants or whether Charles Gentile was individually creditworthy. Indeed, many facts in the record suggest that the Gentiles sought the loans as joint applicants.”
The court noted the caption “co-applicant’s signature (if you are requesting the financial accommodation jointly)” under Stephanie Gentile’s name on the first loan as one of those facts, as well as the fact that the Gentiles “did not disabuse [SPRC] of the impression that they were indeed joint applicants.”
“[Additionally,] the record does not establish that [SPRC] actually requested or demanded that the Gentiles submit a joint application; rather, the Gentiles appear to have submitted a joint application [of] their own volition.”
The majority concluded the trial court erred by focusing on the existence of SPRC’s signature policy, without taking into account that it was not actually enforced against Stephanie Gentile or, if it was applied to her, it was done so appropriately because she was a joint applicant.
“The trial court did not expressly determine whether the Gentiles were joint applicants,” the majority said. “Because the disposition of this issue is critical to a proper analysis of Stephanie Gentile’s ECOA claim, we have remanded for a new trial.”
Dissent
Brosky disagreed with the majority’s handling of the case, stating he would have let the trial court’s determination stand.
“In this appeal … [SPRC's] argument is limited to the single factual issue of whether the Gentiles were joint applicants. The trial court determined that they were not. After review, I would conclude that this finding by the trial court is supported by the record. I find no merit to [SPRC's] argument that certain other contrary evidence supports its position, because the trial court as fact-finder was entitled to evaluate and assess the evidence.”
