Today, the Consumer Financial Protection Bureau (CFPB) announced that the principles from the landmark U.S. Supreme Court case Bostock v. Clayton County that provide protection against discrimination based on sexual orientation or gender identity also apply to the Equal Credit Opportunity Act (ECOA). The U.S. Department of Housing and Urban Development (HUD) made a similar announcement last month stating that discrimination on the basis of sexual orientation or gender identity was a violation of the Fair Housing Act in response to executive orders promoting fair housing previously signed by President Biden in January.
The National Community Reinvestment Coalition (NCRC) previously suggested that the CFPB follow Bostock in its enforcement of ECOA in its December 1, 2020, comment letter to the CFPB’s Request for Information on the ECOA.
Jesse Van Tol, CEO of NCRC, made the following statement:
“Members of the LGBTQ+ community face discrimination when applying for loans, and this action is a critical step to strengthening fair lending protections for them. A recent NCRC study on mortgage lending showed that same-sex couples are significantly less likely than different-sex couples to be approved for mortgage loans. It also showed that the same-sex couples who are approved for mortgage loans pay higher interest rates and closing costs for mortgages. This kind of discrimination should have been stopped long ago. Today’s move by the CFPB puts banks and other lenders on notice that credit discrimination based on sex is illegal and must stop once and for all.
“In Bostock, the Supreme Court found that sex-based discrimination applied to sexual orientation and gender identity. The language used in Title VII of the Civil Rights Act to define the protected class of sex is very similar to the language used in ECOA.
“Bostock is not an expansive reading by the court; instead, it is a holistic understanding of the term sex. It is not a leap to recognize that if a class of people is discriminated against within the employment arena, they are also being discriminated against within the lending arena and should receive protections to access safe and responsible lending products under ECOA.
“There is still more to be done. We look to the bureau to fully implement these important protections through examination procedures and ensure that the mortgage loan data collection process and the bureau’s forthcoming small business loan data collection rule reflect the findings in this interpretive rule. We also urge the Senate to take up and pass the House-passed Equality Act, and for President Biden to sign it into law.”