CFPB: Equal Credit Opportunity Act Prohibits Lenders From Sexual Orientation, Gender Identity Discrimination

The CFPB will interpret the Equal Credit Opportunity Act (ECOA) and its rules to prohibit discrimination based on sexual orientation and/or gender identity, the agency announced Tuesday.

“In issuing this interpretive rule, we’re making it clear that lenders cannot discriminate based on sexual orientation or gender identity,” CFPB Acting Director David Uejio said. “The CFPB will ensure that consumers are protected against such discrimination and provided equal opportunities in credit.”

“This 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 association,” the agency said.

Since the rule is being issued as an “interpretative rule,” the CFPB is not required to open it for public comment. The rule will become effective on the date it is published in the Federal Register.

The agency noted that in 2016, the CFPB indicated that the law supported arguments that the prohibition against sex discrimination could be interpreted broadly. And last year, the U.S. Supreme Court ruled that the prohibition against sex discrimination in the Civil Rights Act of 1964 encompasses sexual orientation and gender identity discrimination.

CFPB officials said they intend to review agency publications and examination guidance and revise them if necessary. And they said the agency will take enforcement actions that violate the ECOA. Agency officials also said they look forward to working with Congress on the “Equality Act,” legislation that would codify protections for consumers against sexual orientation and gender identity discrimination in all financial services and products.