Rep. Torres’ LGBTQ Business Equal Credit Enforcement & Investment Act Voted Out of Financial Services Committee

H.R. 1443 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 and queer (LGBTQ+) individuals to the Equal Credit Opportunity Act (ECOA) statute. The legislation also includes a Sense of Congress confirming that sexual orientation and gender identity are already covered under ECOA (including the current data collection requirements), while noting the bill clarifies the sex, sexual orientation, and gender identity of the principal owners of a business should be collected as three separate forms of information

There are an estimated 1.4 million LGBT-owned businesses in the U.S. which contribute more than $1.7 trillion dollars to the nation’s economy. According to the National Gay and Lesbian Chamber of Commerce (NGLCC), in 2016, more than 66% of businesses certified by the NGLCC’s Business Enterprise Program identified as gay-owned, 29.1% lesbian-owned, 2.3% bisexual-owned, and 2% as transgender-owned. Certification provides these small businesses with opportunities to overcome historical barriers in access to capital and government procurement contracts.

H.R. 1443 is endorsed by Center for American Progress, Center for LGBTQ Economic Advancement & Research, Equality Federation, Family Equality, Freedom for All Americans, Human Rights Campaign, National Center for Lesbian Rights, National Center for Transgender Equality, National LGBT Chamber of Commerce, National LGBTQ Task Force Action Fund, the National Center for Transgender Equality, Out Leadership, PFLAG National, and SAGE.

Below are Rep. Torres’ remarks given upon passage of the bill out of committee:

“In the United States, there are 1.4 million LGBTQ businesses contributing more than 1.7 trillion dollars to the American economy.  We have a vested interest in sustaining and strengthening these businesses with equal access to credit, which is the beating heart of the American economy. 

As a former New York City Council Member, I partnered with the National LGBTQ Chamber of Commerce to establish the nation's largest municipal certification program for LGBTQ business enterprises, enabling those businesses to enjoy equal access to a 25 billion dollar pool of government procurement.

The legislation before us, HR 1443, builds on a foundation laid by several statutes and regulations.  The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination, including but not limited to sex discrimination. A new interpretive rule from the Consumer Financial Protection Bureau (CFPB) clarifies that the ECOA's prohibition against sex discrimination applies to sexual orientation and gender identity. Section 1071 of Dodd-Frank, which exists to enable and enhance the enforcement of the ECOA, requires financial institutions to report information about the race, ethnicity, and sex of credit applicants who serve as principal owners of small businesses.  My legislation would expand the 1071 reporting requirements to include not only sex but also sexual orientation and gender identity. In doing so, it would enable anti-discrimination enforcement where none might exists. 

Even though the United States has made substantial strides toward LGBTQ Equality, the mission is far from accomplished. 70% of the LGBTQ community remains unprotected by anti-discrimination laws. When it comes to credit in particular, according to the Williams Institute, more than 7.7 million LGBTQ adults live in states that offer no protection against discrimination based on sexual orientation or gender identity. 

It is often said that knowledge is power.  Knowledge affords us the power to detect discrimination that might otherwise go undetected.  Take, as an example, the Home Mortgage Disclosure Act, which is analogous to the legislation before us.  Both the National Community Reinvestment Coalition and Iowa State University reviewed data from the HMDA and found that same-sex couples were denied loans at higher rates than heterosexual couples, despite having comparable creditworthiness.  It also found those same-sex couples paid higher fees and interests.  The experience of the HMDA tells us that sunlight can be a powerful disinfectant against discrimination.  

HR 1443 would make credit more accessible, credit laws more enforceable, and creditors more accountable.  It would represent a triumph of transparency in the service of economic opportunity for all, regardless of who you are and whom you love. I yield back.”