Last week, HUD’s Acting Assistant Director for Fair Housing and Equal Opportunity issued a memorandum directing HUD’s Office of Fair Housing and Equal Opportunity to take a series of actions “to administer and fully enforce the Fair Housing Act to prohibit discrimination because of sexual orientation and gender identity.”

The memorandum is intended to implement President Biden’s Executive Order 13988 on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation (Executive Order).  The Executive Order cites the U.S. Supreme Court’s decision last year in Bostock v. Clayton County, Georgia, in which the Court ruled that firing an employee for being homosexual or transgender constitutes discrimination based on the employee’s sex in violation of Title VII of the Civil Rights Act. Title VII makes it “unlawful…for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual…because of such individual’s race, color, religion, sex, or national origin.”

The Executive Order states that “under Bostock’s reasoning, laws that prohibit sex discrimination—including Title IX of the Education Amendments of 1972, the Fair Housing Act, and section 412 of the Immigration and Nationality Act, along with their respective implementing regulations—prohibit discrimination on the basis of gender identity or sexual orientation, so long as the laws do not contain sufficient indications to the contrary.” (citations omitted).  The Executive Order directs the heads of every federal “agency” to assess all agency actions that were taken “under Title VII or any other statute or regulation that prohibits sex discrimination” and “consider whether to revise, suspend, or rescind such agency actions, or promulgate new agency actions, as necessary to fully implement statutes that prohibit sex discrimination and [the Biden Administration’s policy to prevent and combat discrimination on the basis of gender identity or sexual orientation, and fully enforce Title VII and other laws that prohibit such discrimination.]”

By its terms, the Executive Order does not apply to agencies defined as an “independent regulatory agency” by 44 U.S.C. Sec. 3502(5).  Despite the U.S. Supreme Court’s Seila Law decision making the CFPB Director removable at will by the President, the CFPB continues to be included as an “independent regulatory agency” by Sec. 3502(5).

Nevertheless, it is likely that the CFPB under the Biden Administration will take steps to implement the Administration’s policy goals, including making discrimination on the basis of gender identity or sexual orientation a focus of fair lending supervision and enforcement.  The ECOA makes it “unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).”  Under former Director Cordray’s leadership, the CFPB began to build a case for extending ECOA protection to discrimination based on gender identity or sexual orientation.  While the CFPB under former Director Kraninger’s leadership did not publicize any efforts to extend ECOA protections to sexual orientation or gender identity, the CFPB continued to maintain information about credit discrimination on its website containing the following statement: “Currently, the law supports arguments that the prohibition against sex discrimination also affords broad protection from discrimination based on a consumer’s gender identity and sexual orientation.”  Also, in lieu of holding a symposium on ECOA issues, the CFPB issued a request for information in July 2020 seeking comment on various issues relating to the ECOA and Regulation B.   Among such issues is whether the Supreme Court’s Bostock decision should affect how the CFPB interprets the ECOA’s prohibition of discrimination on the basis of sex, and if so, in what ways.

Companies should also be mindful of the fact that numerous state laws already prohibit discrimination in credit transactions on the basis of sexual orientation or gender identity.  Companies that have not already revised their policies, procedures, and fair lending analyses to incorporate discrimination based on sexual orientation or gender identity should not delay in giving attention to this issue.