Requiring a non-owner spouse to guaranty a business loan merely because he or she is married to the owner of the business, is the number-one commercial loan fair lending violation – or so I’ve been told by our examiners.
Under the Wisconsin Marital Property Act, a spouse acting alone may guaranty or co-sign the debt of a third party (business or consumer). However, without the consent of the non-signing/guarantying spouse, a creditor is limited to collecting no more than $1,000 per year from marital assets (again, business or consumer). The solution is to have the non-guarantying spouse sign a ‘Spousal Consent’ form. This is compliant with Reg. B and enables a creditor to collect from all available marital assets in the event of a default.