Padilla Introduces Bicameral Legislation to Support LGBTQ+ Businesses and Protect Against Lending Discrimination
WASHINGTON, D.C. — Today, U.S. Senators Alex Padilla (D-Calif.) and Kirsten Gillibrand (D-N.Y.) as well as Representative Ritchie Torres (D-N.Y.-15) introduced the bicameral LGBTQI+ Business Equal Credit Enforcement and Investment Act. The bill would require financial institutions to collect data on LGBTQ+-owned businesses’ access to credit and capital.
“With anti-LGBTQ+ legislation and hate crimes on the rise, LGBTQ+ business owners continue to face persistent and unjust barriers to financial success,” said Senator Padilla. “LGBTQ+-owned small businesses are a cornerstone of local economies, and they deserve equitable resources to help them grow and thrive. I’m proud to co-lead this legislation with Senator Gillibrand and Representative Torres to ensure that vulnerable LGBTQ+ businesses receive the support they need.”
The bill would amend part of the Equal Credit Opportunity Act (ECOA), which requires financial institutions to collect data on credit applications submitted by minority- and women-owned small businesses, to include collection for LGBTQ+ owned businesses. Specifically, the legislation would clarify that Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) requires financial institutions to collect the self-identified sexual orientation and gender identity of the principal owners of small businesses, in addition to their sex, race, and ethnicity.
It would also add a definition for businesses owned by lesbian, gay, bisexual, transgender, queer, and intersex individuals to the ECOA statute. The legislation also includes a Sense of Congress confirming that sexual orientation and gender identity are already covered under the ECOA (including the current data collection requirements) while noting the bill clarifies that the sex, sexual orientation, and gender identity of the principal owners of a business should be collected as three separate forms of information.
The legislation is endorsed by organizations including the Congressional Equality Caucus, Ali Forney Center, Center for American Progress, Destination Tomorrow, Drag Out The Vote, Human Rights Campaign, Immigration Equality Action Fund, InterAct, and New Pride Agenda.
Earlier this year, Padilla, Gillibrand, and Torres applauded the Consumer Financial Protection Bureau (CFPB) for requiring the collection of LGBTQ+ identifying data in their finalized rule on Section 1071 of the Dodd-Frank Act. This provision followed their February letter, which urged the CFPB to improve data collection on lending to LGBTQ+-owned businesses.
Full text of the LGBTQI+ Business Equal Credit Enforcement and Investment Act is available here.