The Consumer Financial Protection Bureau (CFPB) recently issued an interpretive rule that includes the protection of LGBTQ people in the Equal Credit Opportunity Act (ECOA). Under the rule, lenders will not be able to discriminate based on sexual orientation or gender identity. The rule also clarifies that discrimination based on “actual or perceived non-comformity” with sex or gender stereotypes is prohibited as well.
The CFPB cites the recent Bostock v. Clayton County, Georgia decision as the basis for the rule. On June 15, 2020, the Supreme Court ruled in favor of Bostock, clarifying that discrimination based on sexual orientation and gender identity was prohibited under Title VII of the Civil Rights Act of 1964.
The ECOA uses similar language as Title VII, stating, “It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction … on the basis of … sex …” Also cited by the CFPB is Regulation B, which prohibits creditors from discriminating against individuals based on sex during credit transactions.
This isn’t the first time the CFPB has interpreted ECOA protections against discrimination “on the basis of sex” to extend to LGBTQ people as well. In 2016, the Bureau sent a letter to Services and Advocacy for GLBT Elders (SAGE), in which it stated, “the current state of the law supports arguments that the prohibition of sex discrimination in ECOA and Regulation B affords broad protection against credit discrimination on the bases of gender identity and sexual orientation.” Now, the recent interpretive rule issued under the Biden administration intentionally clears up any lingering confusion on the CFPB’s stance on LGBTQ rights.
Despite many recent pro-LGBTQ orders from the White House, the meaning of the language of Title VII is still being disputed by many who interpret “sex” to only include cisgender women, and who wish to exclude LGBTQ people from protections against discrimination. Yet, the CFPB’s rule is a definite win for the LGBTQ community.
“In issuing this interpretive rule, we’re making it clear that lenders cannot discriminate based on sexual orientation or gender identity,” CFPD Acting Director David Uejio says in a statement. “The CFPB will ensure that consumers are protected against such discrimination and provided equal opportunities in credit.”
