In a new blog post, the CFPB highlights fair lending protections available to small businesses that have been impacted by the COVID-19 pandemic, particularly minority and women-owned businesses.
While the blog post emphasizes the CARES Act Paycheck Protection Program, it is intended to address all credit programs available to small businesses. It contains a reminder that anti-discrimination laws, such as the federal Equal Credit Opportunity Act, protect business owners from discrimination because of race, color, national origin, sex, and other protected characteristics and that such protections apply to new and existing customers (including depository customers) seeking loans at financial institutions.
The blog post also includes the following examples of “potential warning signs of lending discrimination based on race, sex, or other protected category”:
- Refusal of available loan or workout option even though you qualify for it based on advertised requirements
- Offers of credit or workout options with a higher rate or worse terms than the one you applied for, even though you qualify for the lower rate
- Discouragement from applying for credit by the lender because of a protected characteristic
- Denial of credit, but are not given a reason why or told how to find out why
- Negative comments about race, national origin, sex, or other protected statuses