CFPB Issues Interpretive Rule Regarding Sex Discrimination

The rule clarifies that prohibition against sex discrimination in the ECOA and Regulation B encompasses sexual orientation and gender identity.

3/16/2021

The Consumer Financial Protection Bureau issued an interpretive rule which clarifies that the prohibition against sex discrimination in the Equal Credit Opportunity Act (ECOA) and Regulation B encompasses sexual orientation discrimination and gender identity discrimination, including discrimination based on actual or perceived nonconformity with sex based or gender-based stereotypes and discrimination based on an applicant’s associations.

The CFPB issued the interpretive rule consistent with the Supreme Court’s Bostock decision. The Court relied on three key findings to reach its decision: (1) sexual orientation discrimination and gender identity discrimination necessarily involve consideration of sex; (2) Title VII’s language requires sex to be a “but for” cause of the injury, but need not be the only cause; and (3) Title VII’s language covers discrimination against individuals, and not merely against groups.

The CFPB will review its publications and examination guidance documents, and, if needed, update these and other materials to reflect this interpretive rule. And, where appropriate, the CFPB will take enforcement action under ECOA to hold financial institutions accountable for their actions that violate ECOA.

Question of the Week

Q. What tools and information are out there about reporting fraud or misuse of funds by a representative payee?

A. The Office of the Inspector General for Social Security has provided a report and information about the misuse of benefits.

You can find the fraud report here: Report fraud, waste, or abuse.

You can find information on misuse here: Misuse of Benefits by a Rep Payee. This is a great resource for the credit union and for any of your members who may inquire about what they can and cannot do with Social Security funds, when they are a fiduciary for someone else.

Compliance Alerts

National Credit Union Administration

March 24 NCUA Webinar to Cover Credit Risk Issues Related to COVID-19 Pandemic: The NCUA will host a webinar on March 24 about potential areas of credit risk resulting from the COVID-19 pandemic. Online registration is open for the Pandemic-Related Credit Risks for Credit Unions webinar.

Regulatory Alert 21-RA-05: The NCUA released a regulatory alert to inform credit unions that the CFPB issued a final rule which raises the asset threshold for the exemption to the mandatory escrow requirement for Higher-Priced Mortgage Loans.

Agencies Released Proposed New Interagency Q&A Regarding Private Flood Insurance: The NCUA and other federal regulatory agencies released 24 proposed Questions and Answers regarding private flood insurance. The new Q&A includes areas covering mandatory acceptance, discretionary acceptance, and private flood insurance general compliance.

NCUA Releases Q4 2020 State Credit Union Data Report: The NCUA released data for fourth quarter 2020 which shows that federally insured credit unions experienced double-digit asset and share-and-deposit growth over the year ending in the fourth quarter of 2020.

Consumer financial Protection Bureau

CFPB Clarifies That Discrimination by Lenders on the Basis of Sexual Orientation and Gender Identity Is Illegal: The CFPB issued an interpretive rule clarifying that the prohibition on sex discrimination under the ECOA includes sexual orientation discrimination and gender identity discrimination. This prohibition also covers 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.

CFPB Rescinds Abusiveness Policy Statement to Better Protect Consumers: The CFPB announced that it is rescinding its Jan. 24, 2020 policy statement “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.” Going forward, the CFPB intends to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress.

Federal Housing Finance Agency

FHFA Further Extends COVID-Related Loan Flexibilities: The FHFA announced that Fannie Mae and Freddie Mac will extend temporary loan origination flexibilities until April 30.

Internal Revenue Service

IRS Begins Delivering Third Round of EIP to Americans:The IRS announced that the third round of Economic Impact Payments will begin coming out. The first patch of payments will be sent by direct deposit with a March 17 settlement date. Additional batches of payments will be sent through the mail as a check or debit card.

Office of Foreign Assets Control

OFAC has updated the SDN list as of March 10. The last update prior to this was March 5.

Questions? Contact the Compliance Hotline: 1.800.546.4465; [email protected].