WASHINGTON–The CFPB has issued an interpretive rule clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B includes sexual orientation discrimination and gender identity discrimination.
The Bureau further said the prohibition also covers discrimination based on actual or perceived nonconformity with traditional sex- or gender-based stereotypes, and discrimination based on an applicant’s social or other associations.
“In issuing this interpretive rule, we’re making it clear that lenders cannot discriminate based on sexual orientation or gender identity,” said CFPB Acting Director David Uejio in a statement. “The CFPB will ensure that consumers are protected against such discrimination and provided equal opportunities in credit.”
In 2016, in response to an inquiry from Services & Advocacy for GLBT Elders, the CFPB noted it indicated the law supports arguments that the prohibition against sex discrimination also affords broad protection from discrimination based on an applicant’s sexual orientation and gender identity under ECOA.
Supreme Court Decision Cited
The Bureau cited a June 15, 2020 decision by the U.S. Supreme Court in Bostock v. Clayton County, Georgia, holding that the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 encompasses sexual orientation discrimination and gender identity discrimination.
On July 28, 2020, the CFPB issued a Request for Information (RFI) to solicit public comments and information to identify opportunities to prevent credit discrimination and encourage responsible innovation under ECOA and Regulation B. Among the questions posed, the CFPB asked whether the Bostock decision should affect how the CFPB interprets ECOA.
The CFPB said in issuing the interpretive rule it is consistent with the Supreme Court’s Bostock decision and supported by many of the public comments received in response to the ECOA RFI. The CFPB said it will now review its publications and examination guidance documents and, if needed, update these and other materials to reflect this interpretive rule.
Potential For Additional Action
Where appropriate, the CFPB added it 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.