Opinion ID: 409079
Heading Depth: 2
Heading Rank: 2

Heading: Termination on the Basis of Marital Status: Proof of Credit Discrimination

Text: 19 The ECOA outlaws credit discrimination on the basis of marital status. The regulations proscribe particular adverse actions, including account terminations, which violate the Act if performed on the basis of marital status. Amex argues that it was entitled to summary judgment because Mrs. Miller did not attempt to show that Amex's policy of cancelling all supplementary cardholders on the death of the basic cardholder either was adopted with discriminatory intent or had an adverse impact on widows as a class. In light of the purposes of the ECOA, we do not think such a restrictive interpretation of the regulation is warranted. 20 The ECOA was meant to protect women, among others, from arbitrary denial or termination of credit. See Anderson v. United Finance Co., 666 F.2d 1274, 1277 (9th Cir. 1982). It establishes as clear national policy that no credit applicant shall be denied ... on the basis of characteristics that have nothing to do with his or her creditworthiness. Equal Credit Opportunity Act Amendments of 1976, S. Rep. No. 94-589, 94th Cong., 2d Sess. 3, reprinted in 1976 U.S. Code Cong. & Ad. News 403, 405. 21 In Anderson, we held that there was credit discrimination within the meaning of the ECOA when a regulation promulgated under the ECOA was violated. No showing of any specific intent to discriminate was required. 666 F.2d at 1277. As another court has noted, not requiring proof of discriminatory intent is especially appropriate in analysis of ECOA violations because discrimination in credit transactions is more likely to be of the unintentional, rather than the intentional, variety. Cherry v. Amoco Oil Co., 490 F.Supp. 1026, 1030 (N.D. Ga. 1980). 22 If specific intent is not proved, we nevertheless do not think that a statistical showing of an adverse impact on women is always necessary to the plaintiff's case. The ECOA's history refers by analogy to the disparate treatment and adverse impact tests for discrimination which are used in employment discrimination cases under Title VII. Although none has expressly so held, some district courts have treated the references in the history and regulations to Title VII as if the ECOA plaintiff's prima facie case must always contain elements similar to those required under either the adverse impact or the disparate treatment tests used under Title VII. Sayers v. General Motors Acceptance Corp., 522 F.Supp. 835, 839-40 (W.D. Mo. 1981); Cragin v. First Federal Savings and Loan Ass'n., 498 F.Supp. 379, 384 (D. Nev. 1980); Cherry, 490 F.Supp. at 1026; Vander Missen v. Kellogg-Citizens National Bank, 481 F.Supp. 742 (E.D. Wis. 1979). These courts, like Amex here, relied on an incomplete reading of a passage from the Senate Report to the 1976 ECOA amendments. The Senate Report states that: 23 In determining the existence of discrimination ... courts or agencies are free to look at the effects of a creditor's practices as well as the creditor's motives or conduct in individual transactions. (emphasis added) 24 S. Rep. No. 94-589, 94th Cong., 2d Sess. 4, reprinted in 1976 U.S. Code Cong. & Ad. News 403, 406. The report then cites two adverse impact employment discrimination cases to serve as guidelines in the application of this Act. Both cases are relevant to the effects test, analogous to adverse impact analysis in Title VII. Read in full, the Senate Report allows but does not limit proof of credit discrimination to the two traditional Title VII tests for employment discrimination. It also expressly recognizes that a creditor's conduct in an individual transaction may be considered to determine the existence of credit discrimination, quite apart from intent or from a statistical showing of adverse impact. 25 The conduct here was squarely within that prohibited by § 202.7(c). Mrs. Miller's account was terminated in response to her husband's death and without reference to or even inquiry regarding her creditworthiness. It is undisputed that the death of her husband was the sole reason for Amex's termination of Mrs. Miller's credit. Amex contends that its automatic cancellation policy was necessary to protect it from non-creditworthy supplementary cardholders. The regulations, however, prohibit termination based on a spouse's death in the absence of evidence of inability or unwillingness to repay. Amex has never contended in this action that the death of her husband rendered Mrs. Miller unable or unwilling to pay charges made on her card. The fact that the cancellation policy could also result in the termination of a supplemental cardholder who was not protected by the ECOA, such as a sibling or friend of the basic cardholder, does not change the essential fact that Mrs. Miller's account was terminated solely because of her husband's death. The interruption of Mrs. Miller's credit on the basis of the change in her marital status is precisely the type of occurrence that the ECOA and regulations thereunder are designed to prevent. 26 We hold that the undisputed facts show, as a matter of law, that Amex violated the ECOA and regulations thereunder in its termination of Mrs. Miller's supplementary card. For this reason, we reverse the district court's grant of summary judgment for Amex and instruct that partial summary judgment should be awarded to Mrs. Miller on the issue of liability. The case is remanded for further proceedings consistent with this opinion. 27