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Addressing Financial Discrimination in the LGBTQ+ Community

From the outside, it may seem like the LGBTQ+ community has made significant progress in overcoming legal and financial discrimination. Marriage equality became the law in 2015, and the Biden administration has issued several executive orders granting various legal protections for LGBTQ+ individuals. Access to credit has also improved with a legal reinterpretation of the Equal Credit Opportunity Act.

However, barriers to financial inclusion still exist. According to a 2022 survey by US Bank, 52% of LGBTQ+ respondents struggled to get a mortgage, compared to 38% of non-LGBTQ+ individuals. Additionally, LGBTQ+ people experience higher levels of financial stress, poverty, and homelessness, and they earn less money than the general population.

A Slow Path to Equality

Until recently, discrimination against LGBTQ+ individuals in all aspects of life was often overt and legal. It’s easy to forget that service members could be expelled from the military for being gay or lesbian up until 2011. While discrimination remains a significant issue, there has been progress through courtroom victories. The 2015 Supreme Court decision in Obergefell v. Hodges legalized same-sex marriage nationwide, and in 2020, the Supreme Court ruled that employment discrimination against LGBTQ+ individuals is illegal sex discrimination.

The Equality Act Stalls in Congress

These decisions have been impactful, but they only apply to specific situations. The federal Equality Act, if passed, would enshrine equal rights in all key aspects for LGBTQ+ individuals, such as lending, employment, housing, and access to public services. Although the U.S. House of Representatives passed The Equality Act twice, it failed both times in the Senate. In the meantime, President Biden has issued executive orders to reverse some discriminatory policies related to housing and healthcare. However, these changes can be reversed by future presidents.

Concerns for Equality Persist

Without a federal Equality Act, the LGBTQ+ community remains vulnerable. In June 2022, the Supreme Court overturned Roe v. Wade, and Justice Clarence Thomas suggested that the same rationale could be used to overturn Obergefell and Lawrence v. Texas, which decriminalized consensual, private intimacy between same-sex adults. In response, Congress passed the Respect for Marriage Act (RFMA), which President Biden signed into law. While it adds protection for existing marriages, it doesn’t guarantee nationwide rights to marriage in any state should Obergefell be struck down.

Recognizing Financial Discrimination

Financial discrimination can manifest in various ways for the LGBTQ+ community. While it’s illegal to discriminate against LGBTQ+ individuals in marriage, housing, and most employment situations, loopholes exist, and illegal discrimination still occurs. Intersectionality also plays a role, as individuals who are both LGBTQ+ and people of color or have a disability face additional challenges.

Access to Funding

In 2021, the Consumer Financial Protection Bureau updated an interpretation of the Equal Credit Opportunity Act, making it illegal for lenders to discriminate against consumers applying for credit based on sexual orientation or gender identity. However, this doesn’t guarantee fair treatment by all lenders.

Account Information

For transgender or nonbinary individuals, updating legal documents and identification can be a convoluted and expensive process. Many financial institutions require legal name or gender marker changes before updating accounts, which can be problematic. Fortunately, more credit card companies and banks are allowing trans individuals to use their chosen names.

Homebuying Discrimination

While lenders are not allowed to discriminate, 73% of queer respondents in the US Bank survey felt discriminated against in the mortgage process. LGBTQ+ homebuyers may also face discrimination from real estate agents or sellers. Using a real estate agent who is a member of NAGLREP can help reduce this risk.

Insurance Denial

The LGBTQ+ community has historically faced discrimination with life insurance. However, there is progress, as some companies now offer life insurance to individuals with HIV.

Wage Discrimination

LGBTQ+ adults earn 90 cents on the dollar compared to the average U.S. worker, with trans women earning 60 cents on the dollar. Workplace discrimination impacts the ability to get hired, promoted, and access equal pay. Nearly half of LGBTQ+ adults have experienced discriminatory treatment at work, and over a third have left a job because of discrimination.

How to Address Financial Discrimination

Knowing your rights is crucial to identifying and addressing illegal discrimination. If you believe you’ve experienced discrimination, consider these options for advice and recourse:

• For housing discrimination, file a complaint with the Department of Housing and Urban Development.
• For employment discrimination, file a complaint with the Equal Employment Opportunity Commission.
• Seek advice from organizations like the ACLU, Lambda Legal, or the National Center for Lesbian Rights.
• For transgender or gender nonconforming individuals, contact the Transgender Law Center’s Helpdesk or the National Center for Transgender Equality.
• Many cities offer free or low-cost legal services for the LGBTQ+ community.

The Bottom Line

The LGBTQ+ community has made significant progress, but legal protection and financial inclusion efforts still need to be addressed. It’s essential to be aware of what financial discrimination looks like and where to seek help if you believe you are a victim.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with confidence and expertise.

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