CFPB to enforce lending protections for LGBTQ customers

The Consumer Financial Protection Bureau (CFPB) this week issued an interpretive rule clarifying that it will enforce a federal ban on sex discrimination in lending practices, which also applies to cases where discrimination is claimed on the basis of sexual orientation or gender identity.

Why should we care?
The CFPB said it will take enforcement action under the Equal Credit Opportunity Act (ECOA) to hold financial institutions accountable for violations. Under the ECOA, banks and lenders cannot reject, discourage or apply inconsistent standards to customers seeking credit products or loans because of their sex. 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. The CFPB’s moves highlight the emergence of LGBTQ customers as an underserved group, and clarifies a proactive enforcement role for the agency. “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 in a statement. “The CFPB will ensure that consumers are protected against such discrimination and provided equal opportunities in credit.”