In recent years, the Consumer Financial Protection Bureau has suggested in public remarks that the Equal Credit Opportunity Act’s language prohibiting discrimination on the basis of “sex” includes discrimination based on gender identity and sexual orientation. A letter from CFPB Director Richard Cordray made public last month makes this position plain, signaling that discrimination on the basis of gender identity and sexual orientation will be a focus of CFPB fair lending supervision and enforcement going forward.
Cordray’s letter was sent in response to an inquiry from Services and Advocacy for GLBT Elders (SAGE) in which SAGE posed the question “whether the [CFPB] views credit discrimination on the bases of gender identity and sexual orientation as forms of sex discrimination prohibited under the [ECOA].”
Cordray’s answer is affirmative. In describing the Bureau’s “current thinking,” Cordray states that the CFPB understands “gender identity” to refer to “one’s internal sense of one’s own gender, which may or may not correspond to the sex that is assigned to a person at birth, and which may or may not be made visible to others.” Also, the CFPB understands “sexual orientation” to refer to “an individual’s physical, romantic, and/or emotional attraction to people of the same and/or opposite gender, such as straight (or heterosexual), lesbian, gay, or bisexual.”
The letter concludes that the “current state of the law supports arguments that the prohibition of sex discrimination in ECOA affords broad protection against credit discrimination on the bases of gender identity and sexual orientation.” Cordray’s letter claims that “in recent years, courts have increasingly concluded that the statutory proscriptions on sex discrimination encompass discrimination motivated by perceived nonconformity with sex-based or gender-based norms, preferences, expectations, principles, or stereotypes, including those related to gender identity and sexual orientation.”
Perhaps most significantly, Cordray’s letter notes that the CFPB “recognizes and supports these recent developments in the law,” and regards them as “important and relevant to ensuring fair, equitable and nondiscriminatory access to credit.” The CFPB, therefore, intends to ensure that it interprets the ECOA in a manner that “appropriately reflect[s] the evolving precedents interpreting sexual discrimination law.”
Such language leaves little doubt that the CFPB intends to apply ECOA protections to gender identity and sexual orientation discrimination. Indeed, Cordray ends his letter by expressing the CFPB’s interest in knowing about “any situations in which creditors treat applicants less favorably because of gender identity or sexual orientation” or “if any creditors impose obstacles on transgender applicants who may submit applications designating their sex consistent with their gender identity.”