Press Release

Senator Gillibrand And Congressman Garcia Announce New Legislation To Protect Consumers Against Discrimination In Credit Lending

May 6, 2019

Washington, DC – U.S. Senator Kirsten Gillibrand (D-NY) and Congressman Jesús “Chuy” García (D-IL-04) today announced a new bill, the Protections in Consumer Lending Act, to help protect people against discrimination when they apply for different types of credit. Although it is illegal for credit lenders to discriminate against credit applicants due to their race, religion, sex, marital status, or age, it is still a widely recognized problem and there is currently no method of tracking if discrimination has taken place. The Protections in Consumer Lending Act would require credit lenders to collect information on which applicants have been approved or denied from the following credit transactions: automobile loans, credit card applications, cash checking, small dollar loans, payday lending, and loans with annual percentage rates above 36 percent. This would allow the Consumer Financial Protection Bureau (CFPB) to analyze credit-lending patterns, identify if discriminatory practices have occurred, and enforce anti-discrimination laws. 

“We know that discrimination in credit lending is a problem, but we need more data to understand the scope of it. People depend on credit to be able to buy a car, start a business, and get personal loans. Access to fair credit is essential to establishing financial well-being, but if someone is discriminated against and can only get expensive terms for their loans, it becomes harder for them to get ahead in life,” said Senator Gillibrand. “My bill would help create transparency in the credit-lending process and help identify when discrimination is taking place. We need to do everything we can to make sure that there is fairness in the financial system, and I urge all of my colleagues to fight with me to pass this bill.”  

“We cannot protect communities of color and LGBTQ people from predatory and discriminatory lending if we don’t understand the problem. Unfortunately, under the Trump administration, we have seen the Consumer Financial Protection Bureau (CFPB) withdraw from efforts to crack down on abusive payday lending, and less collaboration between the CFPB and other agencies collecting data that shows a pattern of discriminatory and predatory consumer lending. I am proud to introduce the Protections in Consumer Lending Act with Senator Gillibrand to re-institute data collection that will allow us to protect consumers,” said Congressman Jesús “Chuy” García.

“The NAACP firmly adheres to the adage that ‘in order to accurately and completely address a problem, you must first measure it,’” said Hilary O. Shelton, the Director of the NAACP Washington Bureau and the Senior Vice President for Policy and Advocacy. “As such, the NAACP strongly supports S. 1205, The Protections in Consumer Lending Act, as it will give us the empirical evidence we will need to address discrimination head-on. We sincerely thank Senators Gillibrand, Wyden and others who developed and are promoting this bill,” Director Shelton concluded.

“We applaud the introduction of the Protections in Consumer Lending Act because it takes a crucial step toward enhancing civil rights protections in consumer lending. By mandating data collection about auto loans, credit cards and many personal loans, it will provide a window into who is getting access to credit and what types of loan terms are being offered. A fair and transparent market is essential to a just economy,” said Odette Williamson, Staff Attorney, National Consumer Law Center (NCLC).

“We are happy to support Senator Gillibrand and Congressman Garcia’s legislation which would put into place critical requirements to ensure lenders are not engaging in discriminatory lending practices. Unfortunately we are still living in an era where Latinos and other minorities continue to be targeted for risky loan products and sometimes even steered into financial products aimed at trapping them in a cycle of debt. Requiring the CFPB to collect demographic information and capture information that isn’t currently being tracked and analyzed, will help us to ensure we are working to eliminate discriminatory practices,” said Jennifer Brown, Associate Director, Economic Policy, UnidosUS.

Under the Equal Credit Opportunity Act (ECOA), it is unlawful for any creditor to discriminate against an applicant on the basis of race, religion, national origin, sex, marital status, or age. However, there is no comprehensive database that tracks applicant information, the loan terms offered to the applicant, and whether the application is approved or denied. The Protections in Consumer Lending Act would require credit lenders to collect demographic information for individuals applying for the following credit transactions, if the transaction is less than $15,000 or on a repayment period less than three years: automobile lending, credit applications, cash checking, payday lending, small dollar loans, and loans with annual percentage rates above 36 percent. The demographic information collected would include age, race, sexual orientation, gender identity, sex, and marital status. These data would be collected by the Consumer Financial Protection Bureau (CFPB), which would analyze the information to identify if a discriminatory pattern emerges. Creditors who partake in discriminatory practices would be punished with civil penalties or have their cases referred to the Attorney General of the United States.

The Protections in Consumer Lending Act is supported by the Human Rights Campaign, NAACP, UnidosUS, National Urban League, Americans for Financial Reform, and the National Consumer Law Center.