On Thursday, Rep. Ritchie Torres’s LGBTQ Business Equal Credit Enforcement and Investment Act (H.R. 1443) passed the U.S. House by a bipartisan vote of 252-156. The bill would require financial institutions to collect data on LGBTQ-owned businesses’ access to credit and capital, and amend part of the Equal Credit Opportunity Act, which requires financial institutions to collect data on credit applications submitted by minority- and women-owned small businesses.
“This bill would make credit more accessible, credit laws more enforceable, and creditors more accountable,” Torres said. “It represents a triumph of transparency in the service of economic opportunity for all, regardless of who you are and whom you love. 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. I am proud to lead the effort to deliver results for LGBTQ small business owners as we continue to rebuild our economy.”
The bill would ensure that LGBTQ-owned businesses have equal access to credit opportunities as well as access to the capital they need to grow and create more jobs in their communities. Specifically, it would update the Equal Credit Opportunity Act (ECOA) to ensure that financial institutions collect the self-identified sexual orientation and gender identity of the principal owners of small businesses, in addition to their sex, race and ethnicity. Section 1071 of Dodd-Frank already requires creditors to collect this data, which helps facilitate enforcement of fair lending laws and enables communities, government agencies and lenders to identify community development needs. This bill would also add a definition for businesses owned by lesbian, gay, bisexual, transgender and queer (LGBTQ+) individuals to the ECOA statute.
There are an estimated 1.4 million LGBT-owned businesses in the U.S. which contribute more than $1.7 trillion 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.
“The Equality Caucus is proud to see movement on another of our legislative priorities, The LGBTQ Business Equal Credit Enforcement and Investment Act,” said Rep. David Cicilline, chairman of the Equality Caucus. “For far too long, programs designed to assist minority communities have left LGBTQ people behind. That is beginning to change following today’s vote in the House. I thank Co-Chair Ritchie Torres for his tireless efforts to move this forward. I look forward to continuing to deliver results for our community this Pride Month.”
Justin Nelson and Chance Mitchell, Co-Founders, National LGBT Chamber of Commerce, added, “We cannot fix what we do not track, and so we must pass HR 1443 so America’s economy can achieve its full potential. America’s 1.4 million LGBT business owners add more than $1.7 trillion dollars and tens of thousands of new jobs to the US economy every year, despite the obstacles they face in access to capital, contracts, and more. The inclusion of LGBT-owned businesses in supply chains throughout America, both public and private sector, is now a best practice of successful economies. It is long past time that the Federal Government track and study the economic needs of America’s LGBT entrepreneurs alongside all other diverse communities so that they can get the help they need to continue creating jobs and innovating industries from coast to coast.”
According to the Center for American Progress, half of LGBTQ people reported discrimination negatively impacted their financial well-being in the past year, including nearly 70% of transgender people.
“LGBTQ+ individuals and families have been harder hit by the COVID-19 pandemic, both in terms of health and economics, than our non-LGBTQ+ counterparts,” said Stacey Stevenson, CEO of Family Equality. “This critically important bill will help ensure that LGBTQ+ owned businesses receive their fair share of business capital. LGBTQ+ people and families did not recover as quickly as the general population from the 2008 Great Recession, so this transparency is especially needed as we all rebuild from the pandemic and the economic crisis it created.”