CFPB Clarifies Scope of Equal Credit Opportunity Act’s Protections Against Sex Discrimination

  • The Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (“ECOA”) and its implementing regulation, Regulation B, also prohibits discrimination based on sexual orientation and gender identity.
  • The interpretive rule makes clear that lenders cannot discriminate against borrowers on the basis of sexual orientation or gender identity, including on the basis of actual or perceived nonconformity with sex-based or gender-based stereotypes, or on the basis of an applicant’s social or other associations. The rule cites its consistency with the U.S. Supreme Court’s 2020 decision in Bostock v. Clayton County, Georgia, 140 S. Ct. 1731, holding that the prohibition against sex discrimination in Title VII of the Civil Rights Act also prohibits sexual orientation and gender identity discrimination.
  • The CFPB stated that it will take enforcement action under ECOA against financial institutions that violate this law.