Consumer bureau to enforce lending protections for LGBTQ individuals
The Consumer Financial Protection Bureau (CFPB) said Tuesday it will enforce a federal ban on sex-based discrimination in lending cases where a customer is spurned because of their sexual orientation or gender identity.
The agency issued a rule Tuesday asserting that the Equal Credit Opportunity Act (ECOA) prohibits banks and lenders from rejecting credit and lending services to individuals because they identify as LGBTQ.
“In issuing this interpretive rule, we’re making it clear that lenders cannot discriminate based on sexual orientation or gender identity,” said acting Director David Uejio. “The CFPB will ensure that consumers are protected against such discrimination and provided equal opportunities in credit.”
The CFPB is the latest federal agency to announce its intention to crack down on discrimination against LGBTQ individuals following a monumental Supreme Court decision. The court held last year that Title VII of the Civil Rights Act of 1964, which bans sex-based discrimination broadly, also applies to sexual orientation and gender identity.
The CFPB said Tuesday that the court’s decision also applies to the ECOA, a 1974 law banning sex-based discrimination in lending that the bureau is charged with enforcing. The agency issued a request for public comment on the matter last year shortly after the court’s ruling.
“The CFPB will take enforcement action under ECOA to hold financial institutions accountable for their actions that violate ECOA. The CFPB also looks forward to working with Congress on the Equality Act, which, if enacted, would codify protections for consumers against sexual orientation and gender identity discrimination in all financial products and services,” the CFPB said Tuesday.
Under the ECOA, banks and lenders are prohibited from rejecting, discouraging or applying inconsistent standards to customers seeking credit products or loans because of their sex, even if the firm cited other reasons for differing treatment.
The Department of Housing and Urban Development also announced last month that it will apply the Fair Housing Act, which also bans sex-based discrimination, to LGBTQ individuals.