ARLINGTON, Va.—What will be the effects on credit unions from the CFPB's clarification of its interpretive rule on the prohibition against sex discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B?
One new analysis is seeking to provide some answers.
The CFPB's rule was issued in March 2021 and follows a memorandum issued in February 2021 by the Department of Housing and Urban Development (HUD) stating that the Fair Housing Act protects against discrimination based on sexual orientation or gender identity. The efforts are a result of a recent Supreme Court decision related to the Civil Rights Act of 1964.
NAFCU noted the clarifying rule explains that the prohibition against sex discrimination under the ECOA and Regulation B includes sexual orientation discrimination and gender identity discrimination as they necessarily involve consideration of sex.
Also Worth Noting
In addition, NAFCU also pointed out:
- The interpretive rule does not make any changes to the language of the ECOA or Regulation B, but instead further clarifies sex as a prohibited basis
- Under the rule, an applicant’s sex must be a cause of the injury, but need not be the only cause
- Discrimination against individuals, and not merely against groups, is covered
- The rule prohibits discrimination based on actual or perceived nonconformity with sex-based or gender-based stereotypes as well as discrimination based on one’s associations, including spouses, domestic partners, dates, friends, and coworkers
The rule became effective March 16.