For those who work in the mortgage business, take note, regulators are looking to ensure that same-sex marriages get equal treatment when it comes to applying for credit products.
With little fanfare, the Consumer Financial Protection Bureau took an important step forward when it issued guidance on mortgage treatments, among other credit products, for legally married same-sex couples in a staff memo.
The memo reminded the CFPB now recognizes the validity of all same-sex and traditional marriages in any jurisdiction nationwide regardless of the person’s place of residency.
Those in domestic partnerships, civil unions or other arrangements that are not marriages continue to count as single.
“On June 26, 2013, in United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act as unconstitutional. This decision has important consequences for our work,” Meredith Fuchs, CFPB’s General Counsel, wrote in a staff memo and blog post on the CFPB website in July.
“In order to fully implement this decision, we took steps to clarify how the decision affects the rules that we are responsible for," said Fuchs. "Recently, Director (Richard) Cordray issued a memo to staff clarifying that, to the extent permitted by federal law, it is our policy to recognize all lawful marriages valid at the time of the marriage in the jurisdiction where the marriage was celebrated."
"This aligns our policy with other agencies across the federal government,” Fuchs said.
Currently, according to the Human Rights Campaign, 19 states and the District of Columbia issue proper marriage licenses to same-sex couples.
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The guidance in the staff memo, which can be viewed, advises CFPB employees on the basic principles to be followed when handling related issues, and applies to all statutes, regulations, and policies enforced, administered and interpreted by the bureau.
These include but are not limited Equal Credit Opportunity Act and Regulation B, Fair Debt Collection Practices, Interstate Land Sales Full Disclosure Act and Regulation J, Truth in Lending Act and Regulation Z, Real Estate Settlement Procedures Act and Regulation X, Bureau Ethics Regulations, and Procedures for Bureau Debt Collection.
When the Supreme Court struck down Section 3 of the Defense of Marriage the court was asked whether this section violated the Fifth Amendments guarantee of equal protection of the laws to married persons of the same sex.
That section, which was declared unconstitutional, limited the marriage status to heterosexual legal unions, and the role of spouse solely to persons of the opposite sex who are husbands or wives.
The case was brought to the Supreme Court after the District Court for the Southern District of New York ruled in favor of Edith Windsor, who had been married to another woman in Canada in 2007. When her spouse died, and left her estate to Windsor, she was denied federal tax exemption for surviving spouses. Edith sued the Federal Government, and on June 6th, 2012, the District Court ruled the section unconstitutional, and it ordered the IRS to refund Edith the estate tax.
After the Windsor ruling, mortgage application denials for same-sex couples dropped, but are still higher than denials for traditional couples.