*1 Savings Association, & Loan Anchor

Petitioner-Appellant, Opportunities Commission, Schenk, City Roy Respondents.† U. of Madison and Appeals Court September 9, 1983. No. Submitted on 82-1508. briefs 6, 1983. December Decided 122.) (Also reported N.W.2d granted. Petition to review † *2 appellant

For the the cause was submitted on the briefs Stroud, Willink, of Stroud, Thompson & Howard Madi- of son. respondent City

For the of Madison cause sub- was Henry mitted Gempeler, on the brief city attorney, A. Martin, city attorney. and James L. assistant Respondent’s by Roy Schenk, brief was submitted U. pro se, of Madison. Foley,

Before P.J., Cane, Dean and JJ. DEAN, Savings ap- J. Anchor Loan & Association peals judgment affirming from a an order of the Opportunities City Commission of the of Madison. The against commission found Roy that Anchor discriminated Schenk status, on the basis of his marital in violation of a ordinance, mortgage when it denied Schenk a loan. argues Anchor power Madison did not have lending practices of a state chartered loan, and that Anchor unlawfully did not discrimi- against did have the Because Madison nate Schenk. did Anchor dis- power Anchor because status, his marital we based on criminate Schenk affirm. mortgage He was applied Anchor for a loan. support and maintenance had

divorced and evaluating In payments per Schenk’s month. $500 creditworthiness, fixed Anchor considered his debt-to-in- yields percentage ratio, computation that a come monthly repayment committed to an income recurring expenses. percentage ex- fixed percentage acceptable the maximum and his ceeded application His and maintenance was denied. expenses payments were fixed considered and were used *3 calculating percentage. Anchor in did not consider as obligations expenses the of fixed maintenance seeking persons loans. Without the and payments, fixed debt-to-income acceptable ratio would not have exceeded the maximum percentage. challenge regulatory power

Anchor’s to Madison’s question independently. raises a of law that review we Bank, 313, 315, See v. Union National 111 2d Nelson Wis. 225, 1983). (Ct. App. 330 N.W.2d 226-27 The commis ques sion’s determination that Anchor discriminated is a tion of law will that be sustained if See reasonable. DILHR, 720, 347, v. Jenks 2d 321 4, 107 Wis. 71 N.W.2d (Ct. App. 1982). 351 power

Madison had the Anchor’s discrimi- natory lending practices. possess powers Cities all not (5), Stats.; otherwise denied them. Section 62.11 Wiscon- Decade, 518, sin’s Environmental Inc. DNR, 85 Wis. 2d 532-33, 69, (1978). city’s 271 N.W.2d A 75 exercise of power is not made invalid because it deals matter with a of statewide concern. Id. 533, at at An 271 N.W.2d 76. only express power invalid if there is of is statu- exercise restricting revoking infringes tory language it if or or it general spirit policy of a state law or the of the state. Id. Ordinance, prohibits 3.23(3), sec. dis-

Madison General of marital in credit transactions because crimination Although state, by regulation, statute and status.1 savings loans, regulates see the credit of seq., Stats.; 215, Admin. Code 1.01 et ch. Wis. S-L§ specific statutory language restricting there is no either revoking city’s power or in this area. Nor city that does the ordinance conflict with the state statute prohibits by on marital discrimination lenders based 138.20, contends, See status. sec. Stats.2 Anchor how- ever, policy that the ordinance conflicts a state regulation lending practices uniform statewide and loans. provides: § Ordinance, 3.23(3), Madison General practice It Credit. shall he an unfair un- discrimination hereby any prohibited lawful creditor to discriminate for sex, any person any in credit transaction because race, ancestry, age, handicap, religion, origin color, national status, income, or conviction rec- marital arrest record source appearance, discharge, physical sexual ord, lifespan, honorable person orientation, beliefs, is a political or the fact such student as defined herein. 138.20, Stats., provides part: in Section (1) prohibited. granting loans Discrimination credit (2) 71.07 organization, under s. as defined Eule. No financial *4 may granting any institution (d)l, commercial or credit other any of loan granting form or extension in the discriminate any form capacity obtain credit, privilege to or of the or or physical applicant’s con- credit, on the basis of loan or 51.01(5), or sex disability developmental s. dition, as defined organization or however, no such provided, status; marital any form grant extend required or to be institution shall organization institu- or any person such who loan or credit legal demonstrating lack tion has evidence any respect with to contract therefor or capacity to contract thereto. related security in collateral mortgage interest

676 city ordinance, by providing

The agency an additional prevent discriminatory lending practices, does not con- any policy. city flict regulates state The ordinance lending practices only to the extent those are discriminatory. Practices that under ordinance dis- criminate based on marital pro- status would also be regulations. hibited under state statute and Since the ordinance conflicts with neither policy state law nor expressly is not forbidden, it is not invalid.

The commission’s determination that Anchor discrimi- nated Schenk because of his marital status was required reasonable. Schenk prima was to first make a facie case of Douglas discrimination. See McDonnell Corp. Green, 792, v. (1973).3 prima U.S. A facie by showing case is (1) belongs established pro- he ato group; (2) tected applied he qualified and was for a loan; (3) application his rejected was despite quali- his fications; (4) applicants with his income expenses rejected were not based on their fixed debt- to-income ratio. See id. established, Once the burden then shifted present to Anchor to some nondiscrimina- tory rejecting reason for application. See id.

The evidence presented prima established a facie case of belonged discrimination. He pro- to the group tected persons. divorced If he had not been divorced, payments, although Neither the Madison ordinance nor state statutes case proof law address the burden of issue in credit discrimina tion cases. developed We therefore look to the law under Opportunity § Federal Act, seq. Credit 15 U.S.'C. 1691 et applied Federal courts have anti-discrimination decisions from the- employment Co., area to ECOA cases. See Carroll Exxon U.S.A., Supp. 557, (E.D. 1977). 434 F. 563 n. 14 La. *5 family, not have been would support required to still a fixed not considered therefore and ordered court would then ratio fixed debt-to-income monthly His debt. appli- acceptable limits. Married been within have income, without expenses and but Schenk’s cants not have payments, would maintenance upon debt-to- their fixed rejected based for loans been ratio. income present nondiscrimina- a response, Anchor did not

In not application. It did tory rejecting' reason for family expenses of why maintenance show Although federal law allows persons not considered. are inquire into an lenders 202.5(d) (1), not fol-

obligations, it does see 12 C.F.R. § di- a allows lenders base federal law also low factors on those applicant’s creditworthiness vorced applicants. considering for married without them showing of dis- Anchor did not rebut Schenk’s Since jus- crimination, determination was the commission’s tified. Judgment

By the affirmed. Court. — FOLEY, (dissenting). comprehensive pro- The P.J. regulation 215, Stats., preempt visions of ch. loan Chapter loan associations. experienced demonstrates an intent have uniform regulation impossible enforcement, which would be every city regulate. separately if was allowed to For utility some of the same reasons that Madison cannot set rates, require specific banks to make investments city, require companies improvi- insurance to take risks, dent local it should not be allowed to Regardless practices. loan purpose Anchor’s ordinance, Madison’s because its effect is to practices, judgment. loan I would reverse the *6 regulate An-

Also, if Madison was entitled even Anchor to practices, it for was reasonable chor’s loan obligation differently support from the treat Schenk’s obligation person. a mar- support a married Unlike support obligation, person’s ried may obligation person fixed. a married reduce is While temporarily family expenses without fear of defer being put jail, pay- in must make his Schenk regardless may have volun- ments what other debts he tarily incurred his divorce. must feed since separate quarters, may in he and shelter himself marry again equal obligation an to a second create family. agree lending I While that discrimination solely wrong based on marital is should status not be tolerated, equally wrong I consider it for the law to re- quire ignore a lender to relevant factual distinctions consequence exist as a of divorce.