Lambda Legal Hails Biden Administration for Explicitly Extending Fair Credit Protections to LGBTQ People

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March 9, 2021

The U.S. Consumer Finance Protection Bureau (CFPB) today issued guidance explicitly extending the protections of the Equal Credit Opportunity Act (ECOA) to LGBTQ individuals. Karen Loewy, Senior Counsel and Seniors Strategist at Lambda Legal, issued the following statement:

“While the Consumer Financial Protection Bureau previously had a track record of reading the ECOA’s sex discrimination protections to apply to LGBTQ people, this explicit interpretive rule renews and formalizes that commitment. This rule sends a clear message to all kinds of lenders – from giant banks and credit unions to payday lenders and mortgage brokers – that discriminating against LGBTQ people is off limits.

“We know that credit discrimination is a huge barrier to financial security for LGBTQ people, depriving people of financing for homes, cars, school, or small businesses.  Studies show that same-sex couples routinely have been denied opportunities and faced less favorable terms than different-sex couples in seeking mortgages. LGBTQ people regularly report being denied lines of credit because of their sexual orientation or gender identity or expression.

“These denials exacerbate housing and economic vulnerability, preventing LGBTQ people from buying a home, leasing a car to drive to work, or starting their own business enterprise.  With this interpretive rule by the CFPB, LGBTQ people denied equal credit will have a clear route to getting that discrimination investigated and addressed.  The rule bolsters the arguments we have successfully made about federal sex protections in court and makes the promise of Bostock manifest in the context of credit.”

From today’s announcement:

“The [CFPB] interprets the ECOA and Regulation B prohibition against discrimination on the basis of “sex” to also include discrimination motivated by perceived nonconformity with sex-based or gender-based stereotypes, including those related to gender identity and/or sexual orientation, as well as discrimination based on an applicant’s associations.”

Read today’s announcement from the CFPB here:

In one of his first actions upon taking office, President Joseph R. Biden, Jr., issued the Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation, confirming antidiscrimination protections for all LGBTQ employees and directing all federal agencies to apply the historic Supreme Court ruling in Bostock v. Clayton County to protect LGBTQ people from discrimination wherever federal law prohibits sex discrimination, including in education, housing, credit and healthcare.

For Lambda Legal’s work on credit and LGBTQ rights, see DeWolf and Watts v. Countrywide.