Credit Discrimination and Same Sex Couples

by Jeff Sovern

Our casebook includes a problem raising the question of whether discrimination against same sex couples in the granting of credit violates ECOA (some states have statutes explicitly barring discrimination on the basis of sexual orientation, see, e.g., N.Y. Exec. L. 296-a(1)(a), and a HUD rule bars discrimination on the basis of sexual orientation in FHA-insured mortgages, but that's not exactly the same thing).  So I was particularly interested to see a story in the American Banker this week headlined HMDA Data Offers Clues on Discrimination Against Gays (behind a paywall).  The story, which is definitely worth reading if you are interested in this issue, observes that HMDA data shows credit denials for same-sex couples are higher than for opposite-sex couples, though lower than denial rates for individuals. That doesn't mean that the denials are discriminatory, though it certainly raises questions, especially in light of a HUD study last year of rental units that found that "same-sex couples experience unequal treatment more often than heterosexual couples when responding to internet ads for rental units . . . "

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