- Source: files.consumerfinance.gov
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The Consumer Financial Protection Bureau (CFPB) has issued an official staff interpretation of Regulation B. The interpretive rules states that the Equal Credit Opportunity Act’s (ECOA’s) and Regulation B’s prohibition on discrimination on the basis of sex in any aspect of a credit transaction includes discrimination on the basis of sexual orientation and gender identity. This interpretation includes discrimination on the basis of nonconformity with sex-based or gender-based stereotypes as well as discrimination on the basis of an applicant’s associations.
This interpretation is conceptually similar with the Supreme Court’s 6-3 ruling in Bostock v. Clayton County, Georgia, where employment discrimination on the basis of sexual orientation or gender identity violates Title VII because such discrimination requires an employer to intentionally treat individual employees differently because of sex. It is also consistent with the CFPB’s 2016 response to an inquiry from Services & Advocacy to GLBT Elders regarding ECOA coverage of discrimination on the basis of sexual orientation and gender identity.
Lenders that have not previously incorporated sexual orientation and gender identity in their fair lending policies, procedures, monitoring, and testing will need to do so to comply with the CFPB’s interpretation. However, twenty states and the District of Columbia have incorporated similar protections in state law for at least some types of credit transactions. In addition, many lenders have already included sexual orientation and gender identity in internal policies and procedures on a voluntary basis.