In early 2012, a Bank of America in Florida denied Patty Snyder a mortgage when she listed her same-sex partner’s mother as her co-signer. The bank denied the mortgage on the grounds that the relationship between Snyder and her partner’s mother was not recognized. Under the Department of Housing and Urban Development’s (HUD’s) new equal access rule enacted last year, lenders cannot discriminate among loan applicants on the basis of sexual orientation. Snyder filed a complaint with HUD, and HUD found that Bank of America had engaged in LGBT discrimination. In January 2013, HUD settled with Bank of America. Under the settlement agreement, Bank of America must pay HUD a fine, but will not owe Snyder and her family anything. Despite the success of the new housing discrimination rule, credit discrimination on the basis of sexual orientation or gender identity remains a serious problem in our country.
Under current federal law, it is legal to deny credit to someone on the basis of their sexual orientation or gender identity. The Fair Housing Act prevents discrimination on the basis of sexual orientation or gender identity, but only if the lender receives funding from HUD. Only ten states and the District of Columbia have laws prohibiting credit discrimination on the basis of sexual orientation or gender identity. Two additional states have laws that prohibit credit discrimination only on the basis of sexual orientation.
On June 13th 2013, the Freedom from Discrimination in Credit Act (FDCA) was introduced in the House of Representatives by Rep. Steve Israel (D-NY) and in the Senate by Sen. Patty Murray (D-WA). The FDCA is a federal bill that would amend the Equal Credit Opportunity Act to prohibit credit discrimination on the basis of sexual orientation or gender identity. This is the bill’s third time being introduced in the House by Rep. Israel, and it has gained as many as 77 cosponsors in previous years. As of this posting, only a month after its introduction, FDCA has twenty-three cosponsors in the House. This is the first time the bill has been introduced in the Senate, where it currently has three cosponsors.
The Housing Opportunities Made Equal (HOME) Act would also prohibit credit discrimination on the basis of sexual orientation or gender identity, in addition to prohibiting housing discrimination on those same bases. It was recently reintroduced by Rep. Nadler (D-NY) in the House for the 3rd time and by Sen. Brown (D-OH) in the Senate for the 2nd time. If either FDCA or the HOME Act passes, they will provide strong protections for LGBT families. LGBT people and same sex couples across the United States will be able to apply for mortgages without fear of discrimination.