California Attorney General Rob Bonta has issued a consumer alert to remind both consumers and lenders that credit discrimination remains illegal under state and federal law. The announcement follows the Consumer Financial Protection Bureau’s (CFPB) decision in October to end a consent order related to Citibank’s alleged discrimination against Armenian-American credit card applicants in Southern California. This move was part of broader changes by the Trump Administration affecting the CFPB.
“Credit discrimination remains illegal in California and throughout the United States. The Trump Administration’s premature termination of the settlement with Citibank for discriminating against Armenian-American applicants in California is alarming and no doubt another sign of the Bureau abandoning its obligation to protect the American people from unfair treatment by big corporations,” said Attorney General Bonta. “This, however, is not a sign that no one is looking. Let me be very clear: I will use the force of my office against financial institutions that deny brighter financial futures to Californians on the basis of their sex, race, religion or any protected characteristics.”
Credit discrimination occurs when lenders make decisions about offering or denying credit based on factors such as race, color, religion, national origin, sex, marital status, age, military or veteran status, public assistance status, or other impermissible reasons. Discriminatory practices can include discouraging applications for credit, offering less favorable terms like higher interest rates or fees, or refusing credit despite eligibility.
Federal law prohibits these practices through the Equal Credit Opportunity Act (ECOA), which bars financial institutions from discriminating based on protected characteristics during all aspects of credit transactions (15 U.S.C. section 1691 et seq.). Similarly, California’s Unruh Civil Rights Act extends protections by prohibiting businesses—including banks and lenders—from discriminating in any services they provide (Cal. Civ. Code section 51 et seq.).
State laws also address lending for housing finance specifically. The Fair Employment and Housing Act forbids financial institutions from discriminatory financing terms based on various protected characteristics (Cal. Gov’t Code section 12955(e)). Additional protections are provided under California’s Holden Act and Military and Veterans Code.
Consumers who believe they have experienced discrimination or have information about potential violations can file complaints with several agencies:
– The California Attorney General’s Office at oag.ca.gov/report
– The California Civil Rights Department at calcivilrights.ca.gov
– The California Department of Financial Protection and Innovation at dfpi.ca.gov/submit-a-complaint/
