ALEXANDRIA, Va.–Credit unions are being reminded to ensure all training materials along with policies and procedures promote compliance with federal equal credit opportunity laws and Regulation B, which is administered by the CFPB, in line with a 2020 U.S. Supreme Court ruling.
In a Regulatory Alert, NCUA said the March 16, 2021, interpretive ruling published by the Consumer Financial Protection Bureau clarified the prohibition against sex discrimination in the Equal Credit Opportunity Act (ECOA) and implemented by the Bureau’s Reg B.
The alert reminded credit unions the Act and the rule encompass discrimination based on sexual orientation and gender identity discrimination.
Also Covered
“The interpretive rule also covers discrimination based on actual or perceived nonconformity with sex- or gender-based stereotypes, and discrimination based on an applicant’s associations,” NCUA stated.
The Alert also notes the law and rule cover discrimination against individuals, not merely groups, and further reminds sex discrimination “includes discrimination motivated by actual or perceived nonconformity with sex- or gender-based stereotypes, such as discrimination based on a lender’s perception that a customer’s attire does not accord with the customer’s perceived gender.”
Consistent With Court Ruling
NCUA said the rule is consistent with the 2020 high court ruling in Bostock v. Clayton County, Ga., which held that the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 encompasses sexual orientation discrimination and gender identity discrimination.
“Some state laws already prohibit discrimination in credit transactions based on sexual orientation or gender identity,” the alert states. “Credit unions should ensure their policies, procedures, and training materials promote compliance with ECOA and Regulation B consistent with the interpretive rule. Credit unions should also review automated scoring, decisioning, and pricing models for variables that could be proxies for these prohibited bases.”