Constructing the Yellow Brick Road: Preventing Discrimination in Financial Services Against the Lgbtq+ Community.

Abstract

The Lesbian, Gay, Bisexual, Transgender, Queer, and Questioning (“LGBTQ+”) community lacks explicit statutory protections from discrimination in financial services. After the Supreme Court held in Bostock that employment discrimination based on sexual orientation or gender identity was illegal, the Consumer Financial Protection Bureau (CFPB) issued an informal interpretive rule for the Equal Credit Opportunity Act (ECOA) and Regulation B that made discrimination in the access to credit based on sexual orientation or gender identity illegal. However, this article argues that an informal interpretive rule is easily rescinded and does not provide sufficient protection. Thus, alternative action is needed to create more durable protection from discrimination against the LGBTQ+ community in the provision of financial services. Additionally, the increased use of AI in the financial industry magnifies the need for more durable protections to prevent the accidental usage of biased data to build and train the industry’s AI algorithms. This article examines the potential and limitations of existing consumer protection laws, possible pathways to create more permanent protection, and potential impacts from regulatory changes. This article also considers additional regulatory changes to other consumer protection statutes that may be needed to enable the identification of discriminatory acts. These changes may require financial institutions to collect sexual orientation and gender identity data – something that must be done with sensitivity because of a data privacy issue unique to the community: accidental outing.