CFPB Issues Interpretive Rule on Sex Discrimination

On March 9, 2021, the CFPB issued an interpretive rule regarding sex discrimination under the Equal Credit Opportunity Act (Regulation B).  Regulation B prohibits a creditor from discriminating against an applicant on the basis of race, color, religion, national origin, sex, marital status or age.   This ruling officially clarifies that “sex” discrimination includes sexual orientation discrimination, gender identity discrimination, …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.

This ruling is not unexpected.  In June 2020, the U.S. Supreme Court ruled, in Bostock v. Clayton County, Georgia, that the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 encompasses sexual orientation discrimination and gender identity discrimination.  President Biden also issued an Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation in January 2021 and HUD followed with a memorandum in February which clarified that HUD interprets the Fair Housing Act to bar discrimination on the basis of sexual orientation and gender identity and directing HUD offices and recipients of HUD funds to enforce the Act accordingly

The CFPB also stated they look forward to working with Congress on the Equality Act, which, if enacted, would codify protections for consumers against sexual orientation and gender identity discrimination in ALL financial products and services.

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