CFPB is committed to protecting LGBTQ borrowers under the ECOA
The Consumer Financial Protection Bureau (CFPB) announced on Tuesday that it would monitor any potential lending discrimination based on sexual orientation or gender identity, pledging to protect LGBTQ borrowers.
The CFPB issued a rule of interpretation That said, the Equal Credit Opportunity Act, which prohibits discrimination in lending and credit decisions, includes protection against discrimination based on sex and gender stereotypes against the LGBTQ community.
Clarification follows landmark ruling in June 15, 2020 court case Bostock v. Clayton County, Georgia, who held that the prohibition of sex discrimination under Title VII of the Civil Rights Act 1964 encompasses discrimination based on sexual orientation and discrimination based on gender identity.
The CFPB noted before the issuance of the Bostock hearing, at least 20 states and the District of Columbia have prohibited discrimination based on sexual orientation and / or gender identity, either in all credit transactions or in certain credit transactions, including negotiations related to housing.
“The Bureau is issuing this rule of interpretation to address any regulatory uncertainty that may still exist under the ECOA and Regulation B as to the term ‘sex’ in order to ensure fair, equitable and non-discriminatory access to credit for women. individuals and communities and to ensure that consumers are protected against discrimination, ”the CFPB said in its interpretative rule statement.
In response to its immediate application, Ryan Weyandt, founder and CEO of the LGBTQ + Real Estate Alliance applauded the CFPB’s reaffirmation of the White House’s position on a zero tolerance policy on discrimination.
“Our community, until now, has been too easily subjected to the personal hatred and historical prejudices permitted by both Fair Housing Act and Fair Lending Guidelines,” Weyandt said. “As a former mortgage banker and professional for nearly a decade, this is a welcome change of pace. Our community (LGBTQ +) holds more than 1T $ of purchasing power according to the National LGBT Chamber of Commerce. Why anyone would want to block this potential is mind boggling. “
“This clarification removes the barriers that have been put in place for LGBTQ + people to get funding and, as a result, begin to build generational wealth for families that we have only legally been able to form since 2015,” Weyandt continued. .
In February, the Department of Housing and Urban Development took a similar position as CFPB, announcing that it will administer and apply the Fair Housing Act prohibit discrimination based on sexual orientation and gender identity.
In a memorandum, HUD noted the policy set out in President Joe Biden’s document Executive Decree 13988, who called on executive agencies to “consider other measures that could be taken to tackle such discrimination.”
Research published in April 2019 by de Iowa State University Ivy College of Business said lenders have been less likely to approve same-sex couples looking for home loans and, analyzing national mortgage data from 1990 to 2015, researchers found that same-sex applicants had an approval rate 3-8% lower than couples of different sex.
The study also shows that same-sex couples who were approved for mortgages paid 0.02 to 0.2 percent more, which equates to a total of $ 8.6 million to $ 86 million. per year, in interest and additional fees, compared to non-LGBT borrowers.
“As a gay mortgage professional, this is an issue I have been working on for years and I am very happy to see this decision. As chairman of National Association of Mortgage Brokers, I applaud the CFPB for making this decision, ”said Kimber White. “The LGBTQ + community has experienced discrimination in housing and this clarification now gives the community equality instead. “