The Market Gap
Discrimination in the marketplace unfairly prevents LGBTQ consumers from obtaining needed goods and services and exacerbates the Wealth Gap because they are denied access to necessities, are provided products or services of inferior quality, or are overcharged.
Financial Services Discrimination
Discrimination in the market for financial services, for example, is especially harmful because it prevents LGBTQ people from leveraging their economic resources to obtain necessities, ease flow-of-payments, invest in durable goods, assets, or capital to improve their well-being. Without access to fair financial service, LGBT households can’t buy homes, workers can’t create savings for retirement, community leaders can’t start new organizations, and cycles of indebtedness and high-cost credit can result for at-risk consumers.
Discriminatory Impact
Discriminatory costs to LGBTQ customers add up. A more considerable disparate impact to the LGBTQ community results from widespread cases of unfair denials of banking and credit service, and the additional interest and fees added to loans. Analysis of mortgage lending data from the Federal Reserve by Iowa State researchers showed same-sex couples seeking home mortgages:
- Were rejected 73% more often than heterosexual couples
- Received .2% higher interest rates, on average
- Overpaid $86M each year for home mortgages they received
as compared to heterosexual couples, of similar financial and credit quality.
But because there is no data collection or prohibition on LGBTQ discrimination in lending, there is no hard data to make a definitive case for disparate impact in home mortgages. “We’ve never studied it. It has never come up for any of our clients,” Michael Taliefero, Managing Director for fair lending consultant ComplianceTech indicated to American Banker in 2014.