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Federal consumer watchdog: Yes, denying credit to LGBT people is illegal

You have to give credit where it’s due.

Edie Windsor, who successfully challenged the Defense of Marriage Act after her wife died and she was denied a spousal exemption from the estate tax. CREDIT: AP PHOTO/RICHARD DREW
Edie Windsor, who successfully challenged the Defense of Marriage Act after her wife died and she was denied a spousal exemption from the estate tax. CREDIT: AP PHOTO/RICHARD DREW

The Consumer Financial Protection Bureau (CFPB)just made a simple fix that could make a big difference for LGBT people, especially older adults. As other agencies have done, the CFPB clarified this week that refusing credit on the basis of sexual orientation or gender identity constitutes discrimination. This would include mortgages, small business loans, auto loans, credit cards, and other forms of credit.

Responding to an inquiry from SAGE (Services and Advocacy for GLBT Elders), the CFPB explained that the Equal Credit Opportunity Act’s protections include a prohibition on “credit discrimination on the bases of gender identity and sexual orientation.” Anyone who believes creditors are treating applicants less favorably because they are LGBT should report that discrimination. Protecting LGBT people’s access to credit, the agency wrote, is “important and relevant to ensuring fair, equitable, and nondiscriminatory access to credit for both individuals and communities.”

The CFPB follows several other federal agencies that have made similar determinations, including the Equal Employment Opportunity Commission and the Departments of Labor, Housing, Education, and Justice. Though the guidance does not guarantee that a judge will read the law in the same way, it does ensure that the CFPB will go to bat for LGBT people who are victims of discrimination in credit.

LGBT older adults face a number of unique challenges, but economic insecurity is one of the biggest. The cumulative effects of discrimination over a lifetime make it far more likely that LGBT older adults live in poverty. For example, many elders rely on families of choice, because their own families might not support them and they may not have had any families of their own. Some concerns have been mitigated by marriage equality — for those fortunate enough to be partnered — ensuring couples have better access to Social Security, Medicaid, retirement plans, and veterans’ benefits. Still, gay and lesbian older adults are more likely to report being poor than heterosexual men and women, respectively.

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SAGE CEO Michael Adams told Slate that the CFPB’s clarification “moves the ball forward in ensuring that LGBT older people have access to credit on an equal playing field.”