Fighting discrimination in the credit marketplace

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Equal access to credit based on non-discriminatory criteria is an essential component of economic opportunity and a fair marketplace. The Equal Credit Opportunity Act prohibits creditors from denying credit based on a host of discriminatory criteria, including race, religion, national origin, sex, marital status, age, etc.

The FTC is one of the agencies authorized to enforce ECOA. The recent action against Bronx Honda – which the FTC says discriminated against African-American and Hispanic car buyers – illustrates the need for vigorous enforcement against companies whose practices result in discrimination.

The Consumer Financial Protection Bureau enforces ECOA, too, and also has authority to interpret the statute and issue rules under it. So the FTC – and businesses – look to what the CFPB has to say on the subject.

On March 9, 2021, the CFPB issued an interpretive rule clarifying that ECOA’s prohibition against sex discrimination also prohibits credit discrimination based on a person’s sexual orientation or gender identity. That’s in keeping with Supreme Court’s decision last year in Bostock v. Clayton County, Georgia, which held that the prohibition against sex discrimination in Title VII of the Civil Rights Act includes sexual orientation discrimination and gender identity discrimination.

The FTC has a long-standing commitment to protecting consumers in every community. When it comes to ECOA, it’s clear that discrimination against members of the LGBTQ+ community violates the law. If you handle ECOA compliance at your company, read the CFPB’s interpretive rule to make sure your policies are in accordance with those principles.

In recent statements, Acting Chairwoman Rebecca Kelly Slaughter described the FTC as “a vanguard agency for enforcing civil rights” and pointed to its role “in the ongoing nationwide work of righting the wrongs of four hundred years of racial injustice.” Central to the commitment toward a fairer marketplace is the effective enforcement of laws ensuring that access to credit – a fundamental force for economic empowerment – is unsullied by illegal considerations of a consumer’s race, ethnicity, religion, sex, sexual orientation, or gender identity.

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