The Equal Credit Opportunity Act and Regulation B were written in a time that was less politically correct than the times we now live in.
The Act and its implementing regulation prohibit discrimination in a credit transaction based on the applicant’s race, color, religion, national origin, sex, marital status or age. Further, the Fair Housing Act prohibits discrimination based on a disability. There are judicial precedents from years ago that sexual preference was not a prohibited basis. Technically, it still is not under either the federal law or the regulation. But, if I were a lender, I don’t think I would rely on the technicality.
Based upon the recent Supreme Court decision holding, in effect, that marriage is a constitutional right and mandating that states allow the marriage of same sex persons, I think that the next court that reviews the issue could well hold that sexual discrimination includes the issue of sexual preference. I am not aware of any financial institution that discriminates on the basis of sexual preference; I would be surprised if there is one. Just to be safe, I would review your Regulation B and fair lending policies and add sexual preference as a prohibited basis if you have not done so already.
If two males or two females come into your institution, apply for a loan and say that they are married, I would take their word for it. I would underwrite the loan based on the same standards I would use for any other married couple. Also, I would not ask for proof that they are married. I am pretty confident that if my wife and I came into your institution and applied for a loan, you would not ask us for proof that we were married. To ask for proof of marriage from two same sex persons who say that they are married would be imposing a different standard and potentially an act of discrimination.
While we are on the subject, I would take the same position for transgender persons. If a customer with a full beard and deep voice comes into your financial institution and claims to be female, take her word for it. Bruce Jenner’s change from Bruce to Caitlin has brought a lot of attention and publicity to transgender persons. She was awarded the ESPY award for courage for the change. While some may disagree with the reasoning for the award, I agree that anyone who alters their private parts is a lot more courageous than I am.
Some think that the Supreme Court’s ruling is political correctness run amuck. Others are of a contrary mind. Your personal opinion does not matter. It is what it is; my guess is that the categories of constitutional protection will be further expanded over time. Your job is to stay abreast of the law and make sure that your policies and procedures are up to date as changes occur. And, don’t forget to check your state laws. For example, some states have already passed transgender protection laws such as New York.
Well, it is official! The CFPB has finalized the effective date for the new TRID rules: October 3rd, 2015. They kept the Saturday start date to be consistent with the original effective date of August 1, which is also a Saturday.