Lending And The LGBTQ+ Community: Creating A Fair Marketplace For Queer Borrowers

Just Economy Conference – May 12, 2021

The common stereotype that LGBTQ+ people live in fabulous homes and enjoy luxurious lifestyles is a myth. LGBTQ+ people are
more likely to live in poverty, and less likely to own their homes.

A recent NCRC study showed that same-sex couples are less likely to be approved for mortgage loans, and more likely to pay high fees if they get approved. Other studies have confirmed that being LGBTQ+ carries a price for loan-seekers.

This session explores the hurdles that LGBTQ+ people face when seeking loans, and what lenders can do to help prevent discrimination. What role can banks play in reaching out to the LGBTQ+ community, and helping LGBTQ+ borrowers achieve the goal of home ownership? And what can advocates do to help LGBTQ+ people achieve financial equality?


  • Lee Badgett, Professor, UMass Amherst
  • JuanCarlos Izaguirre, Senior Financial Sector Specialist, World Bank Group
  • Jake Lilien, Compliance Program Manager, NCRC
  • Jason Richardson, Director of Research, NCRC


NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Lilien 00:06 

Hi, thank you for tuning in. My name is Jake Lillian. I’m an attorney here at NCRC and I am the manager of NCRC compliance program. I am very happy to welcome you all to the first-ever NCRC conference panel on LGBTQ issues. We know that there are a lot of people within our community of advocates who are working on LGBTQ issues every day. Survey of NCRC member organizations showed that over 100 of them listed the LGBTQ population as one of their areas of focus. And the NCRC staff itself contains lots of queer employees and allies. A lot of you are probably familiar with a colleague of mine named Karen Shakira Callie. She is NCRC, Senior Program Manager for special initiatives. Pretty much everybody knows Karen, Karen and I have been very eager for some time now to have a large platform, like this conference where we can host a discussion about LGBTQ equality. And so we organize this panel together and we chose the topic of lending. And we chose lending as the topic, because we found that when people talk about LGBTQ equality, they almost always talk in terms of legal rights, such as can same-sex couples get married and adopt, can trans youth legally access gender-affirming medical care, can queer people who serve openly in the military, etc. And those are all hugely important issues. But equality isn’t just about legal rights. To be blunt. equality is also about money. There’s a massive racial wealth gap in this country, as I’m sure you all know, there’s also a significant wealth gap between LGBTQ Americans and their straight cisgender counterparts. And for anyone who hasn’t heard the term cisgender before it just means someone who is not trans. The racial wealth gap and the LGBTQ wealth gap mean that if you’re a queer person of color, then you are especially likely to be at a huge financial disadvantage. There are a multitude of reasons for why this LGBTQ wealth gap exists, and our panelists will be discussing them during the session. But spoiler alert, one of the reasons is access to credit. More and more evidence has been emerging showing that LGBTQ people are less likely to receive a loan when they need one. And when they do receive loans, they’re more likely to receive loans with high-interest rates and high fees. When this panel we’re going to discuss why this wealth gap persists, and what lenders can do to try to ensure that their practices are as equitable as possible. Before I introduce our speakers, though, let me take a quick minute for a plug NCRC has a community of practice for LGBTQ issues, which is a network that Karen and I founded for advocates who focus on these issues. In our work, or just people who are passionate about these issues, it’s a way for us to share knowledge and network and get the latest updates on what’s happening in the community. There is no fee to join and you don’t have to be an NCRC member. We host quarterly zoom meetings with guest speakers, and we have webinars, you’ll be receiving an email about joining the community of practice. And if you’re already a member, then please just ignore it. So with that out of the way, let me introduce our panel of speakers. Our first panelist is economics professor Lee Badgett of the University of Massachusetts Amherst. She is also a distinguished scholar at UCLA Williams Institute, which is an invaluable resource for data on sexual orientation and gender identity. She’s also one of the Williams Institute’s co-founders, and she is an author. She is the author of a book titled The Case for LGBTQ economic equality, why fair and equal treatment benefits us all. Our second speaker will be Juan Carlos. He’s a gay izagirre, who is a senior financial sector expert on financial inclusion and consumer protection issues. He is currently leading the LGBT employee group at the World Bank, and the World Bank is doing some fascinating work promoting LGBTQ issues around the globe. Our third speaker is Kay Kenneth Davis, who is better known as the trans capitalist. He is a financial consultant who specializes in helping trans clients manage the unique economic challenges that they face. And he is the author of a financial workbook titled The most important money talk your parents never gave you. Last but not least, we have NCRC his own Jason Richardson, who is the director of research, he and Karen co-authored a study last year on same-sex couples in mortgage lending. He’s here to explain their findings, which showed that same-sex couples do not on average receive the same quality of lending products that different-sex couples do. So without any further ado, let’s go on to the panel. Professor Badgett you were our first guest speaker at a community of practice meeting. And you really summed up very nicely where various groups within the LGBTQ community stack up economically. And we were hoping you could give us some more insight into that topic. Welcome. 

Badgett 05:45 

Great. Thank you so much. Thanks, Jake. And Karen, for organizing this, I’m honored to be invited to speak to you at this amazing conference. So I’m going to start us off this larger conversation by thinking about income, if we’re thinking about wealth, and most of the time, we’re also thinking about income, because that’s how most people build wealth is through the money that they bring in, almost always through jobs. And income is an important measure for lots of other reasons. It affects our health, and other kinds of well-being. And it matters for, for where we live, it has many different effects on our daily lives. And so I’m going to talk about this from a couple different perspectives of two reports that I if I can figure out how to do it. I will put this in the comments after I’m done. But two recent studies that have come out on this issue one is the National Academies of Science, Engineering and medicine came out in the fall with a big report on the well being of sexual and gender diverse populations, including LGBT people, LGBT plus people, and I participated in writing a long chapter on economic well being so if you want, like real numbers, that’s a great place to find them. And then my colleagues carpenter and Dario sansoni, and I just came out with a piece called LGBTQ economics, which also has some very up-to-date figures. But I’m going to talk very generally about this. And I want to hit on two key themes. One is a theme of inequality of economic inequality. And Jake has definitely foreshadowed this. And this is important, I think, to mention off the bat, we have lots of stereotypes that also apply sometimes to the economic well-being of LGBT people, but we’re gonna really focus on a very different picture, which shows inequality in the wrong direction for LGBT people. And then secondly, just to at least hint at what some of the dynamics are, that are going to shape that what that any quality looks like and, and then I’m thinking about bias and prejudice in different kinds of contexts as well as adaptations so that people might actually need but let’s start with the, with the, the economic status of LGBT people measured in terms of income. There’s there are many studies that have looked at this in the United States and actually Around the world, and they have when looking at sexual orientation differences, which is the main thing we know about the main thing, we have pretty, pretty good emerging data sets on, we see two very clear patterns. One is for men, and we really distinguish assist people from, from transgender people. Unfortunately, there’s a very different pattern for women. Let’s start with the pattern for men. So if we compare, if we compare the earnings of gay and bisexual men to those of heterosexual men, we find that actually the gay and bisexual men earn less than do heterosexual men, even after we control for all the things that matter for incomes, like how old people are, and how much experience they have, how much education they have, where they live in the country, whether they’re married or not, what their race is, those factors taken into account, still, we see this big gap between gay and bisexual men and heterosexual men. A study that looked at a whole bunch of different studies all together a few years back found that that gap was about 11%. So gay and bisexual men are about 11% less than then comparably qualified and heterosexual men with comparable characteristics. So that is, that is a gap that’s very consistent. And we have seen this actually, in different parts of the world, I will just mention that there have been a few studies that suggest that maybe that gap is decreasing a little bit over time, that’s actually very hard to follow, that I’m happy to talk about data in the q&a. I don’t want to go into too many details. But I will just say we have one data set, where we can actually follow a subgroup of LGBT LGBT people over time. And that’s the American Community Survey. We can we have that going back 20 years or more, but we also and we can see people who are in same-sex couples. Actually, we know from other research that people in same-sex couples mostly are gay or lesbian-identified. Bisexual people, by and large, are different-sex couples. But anyway, so it does, it does capture only a subgroup of people in couples. And when we look at the same kind of question, what did the earnings of men and same-sex couples look like compared to men and different-sex couples over time, we actually do not see a drop in that gap that gap has gone up and down over time, but it has stayed pretty stable, and it is still negative even now. So so we have a persistent, pervasive wage gap for game bisexual men. What about for women? It’s a little bit complicated, because what we actually see when we compare lesbian and bisexual women to heterosexual women is that by and large, the lesbian and bisexual women earn more than the heterosexual women do. And that’s for a couple of reasons. Number one, heterosexual women tend to have very different patterns of labor force participation than lesbian or bisexual women do. They don’t work as many weeks in the year they don’t work as many hours they don’t work, they haven’t worked as many years. It’s very hard in research to see those differences. So they kind of get folded in to that, what looks like an advantage for lesbian and bisexual women. And some people have even called it that. But in fact, we think what it is, is just mainly lesbian and bisexual women having more experience for which we think they probably shouldn’t be paid more. And someday, maybe we’ll have the data where we can take that directly into account. Interesting way, if when we do the same thing that we do for men, when we looked at women and same-sex couples, and look to see how the gap, compare the positive gap compared to women in different-sex couples changed over time, that gap has almost completely disappeared. So there is almost no remaining wage advantage, at least in that particular data set for women and same-sex couples. So things are happening, we’re still trying to figure it all out. But things are changing, but not obviously for the better for either gay and bisexual men or lesbian, and gay men and so on, we do have a little tiny bit of good data on transgender people in the United States, there’s really only one good study where we can look at these economic outcomes for transgender people and compare them to cisgender people. That’s a public health data set called the Behavioral Risk Factor Surveillance System. And what we see there is that gay and bisexual people are sorry, transgender people have much lower household incomes than do similarly situated cisgender people. So there’s a very clear and large It’s something on the order of depending on which group of transgender people 10 to 15%, lower household incomes overall. And let me just say, you know, these, these studies of income are, in a sense, just fancy ways of comparing people at the average, looking at average differences. If we focus just for a second, on people at the very low income and the spectrum, people who are living below the poverty line, we actually see some very clear and striking patterns. Lesbian, Gay people actually don’t do any better. But they also don’t do obviously, they’re not obviously worse off with regard to poverty than heterosexual men and women. However, transgender people and bisexual people in several studies have been shown to have significantly higher risks of poverty than then cisgender people and higher rates than then lesbian and gay people, for bisexual people. So so the most recent study that I did with some colleagues at the Williams Institute, we found that transgender people had a rate of poverty of about 29%, which is just shockingly, shockingly high. So so there are large discrepancies in earnings and access to income for LGBT people across the board. And that looks particularly damaging and harsh for low-income people who are bisexual or transgender. Let me just add a couple of layers of intersectionality. To this one, I sort of hinted a little bit that with regard to gender, thinking about cisgender women, whether they’re heterosexual or lesbian, or bisexual, they all earn less than cisgender men do, whether they’re gay, or were straight men. So there’s definitely the same kind of gender gap that we see more broadly in our economy we see there. And as I said earlier, I see that for transgender people. If we layered on top of this differences across race and ethnicity, we would see that, that there are very different patterns of income, and I won’t have time to talk about poverty, but very different pedosphere increment poverty for people of color who are LGBTQ, white people in general, white LGB, people tend to earn more than your black or Latino, or Latin x, LGBT people. And when we look at Black and Latin x LGBT people, and most of the studies that we’ve got, it also looks like they earn less than heterosexual black and Latin x people. So so there are definitely different forces kind of shaping the economic experiences of LGBT people that are related to their sex, their gender, and, and their race and ethnicity. Last, let me just say, I don’t have a running out of time, but I will just say that, that we do have very good evidence from an entirely different kind of sort of research approach. This suggests that there is bias and discrimination that is shaping some of these patterns for LGBT people. And I’m happy to talk about that more in the q&a. But I will just say you will hear something about credit discrimination, all these panels about income are very much likely behind the fact that LGBT people are significantly less likely to own homes. So that is an important marker of wealth. that I know is one that’s very important to the NCRC, folks. So I will stop there and look forward to the conversation. And I will post those links now. Thanks. 

Izaguirre 16:42 

Well, thank you very much for the invitation to the NCRC very glad to talk about a bit of the work that the World Bank has been doing on the topic of fair finance, responsible finance and how this is connecting actually, with getting more information around the LGBT population. So firstly, I will just briefly tell you that the World Bank Group has several units that have some level of engagement with issues related to LGBT community. On the one hand, we have a responsible financial access team that is supporting the implementation of good practices for financial consumer protection in a range of emerging markets. This cause these good ideas align with the OECD principles for financial consumer protection. And both include the importance of third treatment of consumers, especially vulnerable consumers and minorities, including sexual orientation, and gender identity minorities, which are called up explicitly in these documents. The woman group also has a sexual orientation and gender identity or surgery team that is aiming to generate data with knowledge and evidence on LGBT population in a range of world migrations in the state. For example, have a carried out important surveys on the economic situation and experiences of LGBT population in a few emerging countries to better understand the challenges and their experiences on a range of economic issues included in a couple of countries on experiences with financial sector, access and usage. Our private sector focused institution the International Finance Corporation, IFC has also promoted responsible finance by financial institutions. It has just recently started to expand their initial work on gender, to also include Saudi sexual orientation and gender identity. This is just recently from last year. Last but not least, that consultative group to assist the poor or secret is a financial inclusion Think Tank house, the World Bank is supported by over 30 organizations that promote responsible financial inclusion, and we are working with authorities, financial institutions, but there’s several centers and other stakeholders to raise the importance of hard in the LGBT community. In part of our discourse. Recently, for example, we published a paper on COVID-19. A challenge challenges, especially the former workers segment, and we call that the challenges of the LGBT community. And we asked authorities to do more of these points so that these populations segment would also receive support in such challenges. I would like to highlight that on the topic of responsible financing consumer protection. More recent years, there has been an important evolution. Globally, countries like UK, Australia, India, Peru, Ghana, Philippines, Malaysia alone embracing the concept of consumer protection focused on customer outcomes. This means that regulators providers shall shift their mindset from more traditional compliance with strict rules to focus on actual outcomes or results attained by consumers. When they engage with financial solutions and outcomes based approach. It goes a variety of tools to help authorities providers better understand the customer’s needs, and incentivize providers to address these needs, putting customers at the center, looking at what results consumers are obtaining with being engaged with, with financial services. By putting customers at the center, there’s much greater focus on understanding the experiences and challenges of difficult human segments, especially vulnerable consumer segments like population. However, I have to say that based on our initial desk and field research, segmented data, is unfortunately not adequately collected middle, and this overall different types of segmentation criteria, but of course, especially on Saudi. At the same time, we have discovered that there is much more interest in appetite for both authorities and financial institutions to embrace this type of hardcore base or customer centric consumer protection approaches they put to work or better gathering data about consumers, including segmented based on conversations with providers and authorities. There’s a critical understanding that a customer who is protected impacts value from the user manager services is more likely to be able to capture opportunities and build resilience against shocks economic risks. It is a study to be understand, understood that this is also good for businesses in the depths of main outcomes, we’re talking about choice, which entails that providers must keep a range of choices of products for all types of clients in the same manner, equal voice, which entails appropriately listening and gathering information from consumers throughout their journey of engagement with a provider safety and security details protecting the privacy of information over clients, equally sensitive data and the clients do need to survive suitability and appropriateness which relates to being author product, that sweet the characteristics of a consumer or household fair treatment, retails ensuring non discrimination and equal respect. And meets purpose which entails Certified Ethical does what it’s supposed to do is considered, we may say that it is beneficial for financial institutions to be customer centric to capture. Now, a key way to be customer centric is to gather customer insights at all stages of the product lifecycle. And this includes collecting key demographic information that helps segment the clustering consumers. We have done quite some more work on these point on how a providers can be more customer centric. And we have seen some interesting examples, three different levels, learning from customers, designing solutions, organizing for learning from customers. A key point is collecting segmented and interesting examples, we have seen that the State Bank of Pakistan is requesting financial institutions to provide to provide aggregated data of customers and third party agents or intermediaries that disaggregated by gender, this means that only men and women, but also third option for transgender and non binary population segments. So Pakistan is doing this. And they are starting to do more evaluation here analysis, which is the second point, I realize it based on the information collected from consumers, which include, for example, b2b personas, or profiles of customer segments based on that segment. The third important point around very proud customers is generating leads, for example, just a few weeks ago, recently conducted consumer research to better understand different groups of consumers had informal, informal, online commerce marks. As part of this research we did in depth interviews, and small group discussions with different types of tools. To better understand characteristics of different types of customers. We talk with a 29 year old transgender woman who has lived her entire life in Pakistan, and runs an online business. She shared many stories of how being a trans woman has resulted in restrictions of both bed remover for public spaces and harassment by strangers, thankfully, that she has support, struggles to finish university and being hired, led her to PR Secretary Purdue that buys and sell goats online. She shared that she relies on her brother in costume to score her public or her safety. It explains to her sort of contact with people she doesn’t know and trust. This has had implications of how she handles payments, she doesn’t have a bank account because she feels this is only for the most awkward, and she’s not comfortable about the type of information that will be shared about her or what could be done with it, which she said uses a mobile money account that facilitates money transfers, use of ATM gifts get much more convenient in use it in talking with ages and other types of more direct engagement with the provider. So, these are just an example of how financial institutions can really understand the type of experience of consumer segments and how similar type of these type of activities has done by a few other financial institutions. Also, looking at specific segments of LGBT population, which is some important reason. Another important element or customer centricity is designing solutions based on consumer insights. Here, for example, we have seen that Peru, Uganda and other emerging countries transgender pleasure have had several issues around her treatment. And in many cases, their main point of contact happy consumer associations, who have in turn raise complaints to consumer organizations to sorry consumer protection agencies or other state authorities. In cases such as E. Peru, the general consumer protection agency actually managed to persuade a financial institution in recognizing their treatment to LGBT population. Also, in one specific case, they managed to persuade into actual mandate a prostitution to recognize a same sex civil union based on a for a marriage certificate, even when marriage is not legal, improved by the state that don’t recognize that marriage was a discrimination action. So the ATO consumer protection agency did make a change and published the statement, the decision so that these action would encourage audit financial institution to follow the same type of action that is not discriminatory. We’re also seeing actually that so providers such as some car providers, are now allowing the user to indicate a preferred name on the front of their card, debit card or credit card. This is really an interesting case to address some problems that especially transgender non binary Many populations have had in terms of God, except the problems of identification and denying some services because the consumer officer or financial institution do want to recognize the gender identity. So now, these will be better addressed by allowing consumers to actually indicate their preferred name. The final point is organizing for delivery important also for customer centricity. This includes, for example, allowing for male, female and non binary, and loan officers, intermediaries that offer financial products, so they can help consumers peak more comfortable with using financial services. We have heard already some cases in South Asia, where agents who are transgender or non binary have been quite successful in maintaining longer temporary financial relationships with clients by kind of having a good report with different segments of clients in being much more friendly, and being successful in their engagement. So this type of openness to come in customer facing staff and intermediaries that are non binary, have been welcomed by a financial institution by seeing the success rates of good, long standing loyal relationships with customers. So these are just a few examples of actions that have been done recently. Now be happy to share also on the chat, some resources around these other research that we have done. Thank you. 

Lilien 30:05 

All right, our next speaker will be Kenneth Davis. 

Davis 30:17 

Sorry about that. So I wanted to start off with a story about a young person named Joe. Now Joe has three days is from a loving family, but then actually realizes that they are transgender, and his family disagrees with Joe. So now Joe is kicked out and disowned. And now you’re probably thinking, what choices can Joe make, especially being transgender within this world, so the options are either the streets where you can face being homeless, where even 68% of homeless youth are homeless due to the fact that they were kicked out and disarmed as well. So then there’s the other option of college. So let’s say job chose college. And Joe, actually, graduates because college was actually the place for them to have shelter, and continue with food, and do not care about what major they’re in, but just to get something to survive. But when Joe graduates, Joe encouraged, especially for LGBT people, 50% more college debt than the average person. So Joe has all this debt looming over their head, they’re thinking of what sources of income can they actually do. But we need to understand that one, they don’t have the sources of income because they can’t go to their families because their families do not own anymore, or understanding that Joe has these two statistics weighing over their head, or one, that especially since Joe is a person of color, that the unemployment rate is four times the national average higher for transgender people, and then understanding that the average salary for a transgender person, especially transgender person career is only 10,000 a year who can live or even survive on that. But just understanding that Joe is looking for a job, people have to understand that within your transition mean, you are going to look a certain way. And as they are applying for the job, they cannot hide who they are compared to the LGB counterparts who they don’t have to out themselves anymore, that they can able to find their dream job. But according to Joe being transgender, they have to go to HR. And they have and people have to understand that HR has default white cisgender hetero normally spaces of how they should appear, how they should look, and how they should act within these environments within these work environments. But understanding that if Joe outs themselves, they are putting themselves within a toxic place, where it can turn toxic for their work environment, but also face discrimination from their colleagues, and now Joe has another choice to face to either leave this job or accept it because you have to understand there are rarely any transgender people of color in power physicians within these corporations. Transgender people are left to take lower salaries or they act to actually have to work hourly wages, and the If they receive that job and that salary is very low. So Joe has another decision to understand that if they leave this job, they are going to have to fight and fend for themselves and work in a gig economy. So gig economy can actually be something of use, where they can help build the side hustle and get their entrepreneurship. But then when it comes to lending and getting a loan, they are often turned away, because they have in stable, unstable income. And you have to understand that even if they do take this job, and even trying to get life insurance as a murderous source of income, that they are discriminated against fair as well, because they’re adding themselves due to medical and psychological discrimination within that as well. So even if they counted themselves as bipolar or having suicide attempts, that is counted against them, even gaining life insurance, and has some as another risk. But even understanding the transitional expenses are always higher than their cisgender counterparts, but they have higher costs, insurance and health care. And we can start on family planning, or even surrogacy, because Insurance companies do not cover them. Most changing their people are covered under Medicaid, which barely covers their transitional expenses. Anything higher than that says for family planning has to come out of pocket, and even with their transitional expenses are going to life surgery, gender affirming surgery, we actually call that life saving gender as surgery within the community. Because this is more than a necessity, and not looking to appear as a cosmic or cosmetic place for the transgender people. And I want to understand, I want you to understand also, if they have to find another source of income, the transgender community relies heavily on credit cards, because their financial literacy rate is very low, they do not understand the rule of financial literacy or even understanding that there’s actually rules for money. But even starting up their credit journey, they are penalized from changing their name and other ID documents. And they start off with a lower credit score than their average counterparts, which is horrible, because when they depend on the credit cards, because their transitional costs, probably for their life saving surgery ranges anywhere from 8k to 10k. Where is it coming out of their pocket, it’s coming out of themselves. And they can’t afford these. So they depend on credit cards, but they don’t understand the concept of interest. And also do not understand overdraft fees from their own self. Because at the end of the day, transgender people are trying to survive. They’re trying to keep their head above water. And they’re already faced with so many discriminations when it comes to the simple solutions that people may think that they can have, especially when I just talked about trying to find a job, and then discrimination within that workplace, they can grow. So they tried to do entrepreneurship. And when it’s time to get a business loan, they’re at risk of lending, because they do not have the stable income that their counterparts actually do. So even if and to even look for the future, you have to understand that transgender people future is only a month or two months out in advance, because they are struggling to pay their current bills that they have, because due to not finding a stable income, that the society or even this capitalistic world would be able to offer them. And I want you to understand that even having a savings account, they do not have them. They use them as a second checking account. They have lower rates of looking into IRAs, individual retirement accounts, because they are looking to survive. And then even understanding that you don’t even have home ownership. So I always ask the question, as Joe is going through this path, what can Joe do? And this is very hard, because these are obstacles that Joe has to face. Now want to put a face to these numbers that you were looking at, even with the data for transgender people actually row, I want you to understand that I am Joe. My clients are Joe, and we are fighting to get a piece of the American Pie or their American dream. But we are unable to do so with all these discrimination and redlining practices that aren’t within place with this systematic oppression of capitalism. So how came Sorry, I always want to ask you the question. How can we survive within? Thank you. 

Richardson 38:09 

Hi everybody. Thank you Jake. My name is Jason Richardson. I’m the director of research for the National Community Reinvestment Coalition and Today I’m going to share a few screen a few slides from a report that Karen, Shakira Callie and I did last year on same sex couples and mortgage lending. And we should be sharing now. There we go. Perfect. All right. This report actually, we’re gonna Karen’s in the chat right now. And I think she’s going to drop in some some background on the report that I’m going to talk about, including some some notifications that we’ve got today from the from the from Congress that we were mentioned in a memo that was issued today by the Financial Services Committee. And we were mentioned on the floor as well. So let’s take a look at this. What when Carrie and I started working on this report, we realized that during literature scan, there was very little out there right now on the on how same sex couples were encountering the mortgage market. There were a couple of small reports. But the nature of mortgage data, prior to 2018 made it very difficult to really use the largest mortgage data set, which is the home mortgage Disclosure Act data. However, in 2018, some interesting new variables were added to the to that data set including details on things like loan costs, interest rates, closing fees, and things like that. And that kind of gave us a pathway, we felt to take a look at same sex couples and see how they were performing in the in the market differently than different sex couples. So the 100 data set comes out every year, and it has about 12 to 14 million records. And these are all the about 88% of mortgage applications that are filed every year in the United States. We cut that down to a data set of 6.5 million home purchase loans for owner occupied properties. In 2018. Out of those loans, about 3 million of them included both an applicant and a co applicant, where both of them had indicated their gender on the on the loan application. So you understand a lot of you know, if you apply for a mortgage, and there is no co applicant, then obviously they’re not there. And not every applicant fills out the demographic data. But with 3 million loans to look at, we were pretty happy with the size of the data set. About 5% of those cases, the gender of the applicant and the CO applicant was identical, either male or female for both. And we realized that that’s pretty close to the 4.5% of the general population that identifies as LGBTQ plus. So we’re pretty happy with the other representation, at least of the same sex couples in the data set. And so we just wanted to do kind of a descriptive analysis here just to understand a little bit more about this data before we really dived into it. And the first thing we noticed was that different sex couples are typically much older than same sex couples. We’re looking at those under the age of 35, and 35 to 54 is about the prime homebuying years for most people. So under 35 years of age, only 37% of different sex couples that were purchasing a home, we’re under the age of 35, compared to 41% of same sex, female couples and 49% of same sex male couples. We also took a look at the race of the applicant, or race or ethnicity of the applicant for three all three different categories. And this was also interesting different sex couples are much wider than same sex couples with 73% of different sex couples on home purchase loans. Both applicants were were or the the applicant was white, 10% Hispanic 4% black and just 6% Asian American or Hawaiian or Pacific Islander. Meanwhile, for same sex male couples and same sex female couples, it was a very different story, just 59% of those homebuyers were white. And finally, we also looked at their income within a kind of a broad context. The the mortgage data measures low or moderate income, which means the income of the borrower is 80% or less of the median income for the place that they’re living in middle or upper income borrowers are anything that anything above that 80%. And here we also notice some variations. In particular same sex female couples, you can see that they they are much more likely to be a low or moderate income borrower than middle or upper income borrower. While same sex male couples in different sex male different sex couples were generally pretty similar. So just a few things that we were able to To take from this kind of descriptive analysis that we did, same sex couples are generally denied for a loan more often, they pay higher interest rates. And in particular, same sex males play high pay higher closing cost, and we’re not really sure why. But that’s what we found. So there’s a lot of complications to this. This is a relatively simple descriptive analysis where we’ve pulled the data for, you know, 3 million loans that we wanted to look at. And we’ve just looked at at, you know, differences between three pretty broad categories. I’d like to think that follow on work here would include a much more rigorous analysis, especially of confounding variables, such as age, race income, we see there’s a lot of overlap between same sex couples and a lot of other categories that we already know suffer pretty extreme discrimination in the mortgage market. But teasing out how much of that is related to the same sex status would be would be ideal. I think it also we’re hopeful that at some point in time, the Consumer Finance Protection Bureau, which manages the Honda program, will add questions on sexual orientation and transgender status to the to the 100 data, we think that that would be would make it much more useful. See here. So that was what we did. And we’re very happy with this report. I’d like to, you know, answer any questions if anybody has any, just put them in the chat, but and also click on the links that I think Karen has been posting to see more about how this work is being used by the House Financial Services Committee. Thank you very much. 

Lilien 45:06 

All right. So this brings us to the question and answer period, we got some good questions from the audience. The first one I’m going to pose to anyone who wants to answer is in addressing the needs of vulnerable populations, such as LGBTQIA. What measures Do you think lending institutions should take to train their staff about bias? 

Richardson 45:37 

Welcome in. So in my so for 10 years or so I’ve been mostly focused on mortgage data. So I’m going to confine me just my comments to that. And prior to that I was a mortgage originator for some time as well. And, and mortgage lending, it’s a, you have a combination of factors that are all kind of stacked against same sex applicants, I think, in a lot of ways. There, there are systemic issues built into the mortgage process that favors older applicants with higher income. And that often breaks down on race and class lines. And in part because same sex couples appear to be much more likely, at least ones in the home buying space, apparently much more likely to also tick these other boxes that we know encounter. You know, systemic discrimination. that’s a that’s a systemic issue that has to be addressed. And we’re already, you know, advocating on several fronts for things to fix that. But I think I think what you’re talking about more is going to be the the the, the in the personal aspect of it, the parts of the mortgage process that are not automated, have to do with how mortgages are marketed and sold, and offered to people and discussed. And I think that that’s where we need to see more action and more attention. 

Lilien 46:57 

Anyone else have any thoughts? Or should I move on to the next question? 

Badgett 47:02 

Well, I mean, I would say, there are different things that you can say. I mean, one of the findings that we had in the National Academies report was that we don’t have a lot of great interventions designed to change, to change people’s reaction to LGBT people in different kinds of settings. So so we do need some more research there, I think. But probably, but but there are a lot of things that you can do, in terms of educating people about, about the fact that discrimination is illegal. And in I think there are at least some states that have explicit state laws. I’m not as aware of kind of the the extent of federal laws and these issues, but certainly the the bostik decision which somebody has asked about in the comments, you know, kind of conclusively says, discrimination against LGBT people is sex discrimination, that is illegal. And and so we, as people need to understand that. I think also thinking through where the different kinds of situations are, that might that might influence people’s reactions to say same sex couple are important to know more about, there’s a little bit of research on this that shows that that people applying for mortgages in a more experimental setting actually are treated very differently from non LGBT people, and particularly, non LGBT white people. So, so they’re they’re just lots of different kinds of layers that I think kind of having some at least to start with, in the absence of knowing lots of different ways of doing this kind of work, at least explaining the policy, pointing out the problem, and engaging people in conversations about how something can can be done about that, I think is a way to start. 

Izaguirre 49:08 

Jake, I would also add all these excellent comments up, they on bias, I think we always need to take a pause and think how could people sort of bias and how bias can manifest. And this goes both into personal issues. Now in terms of thinking about unconscious bias, for example, whether there is something in me that I haven’t noticed, and therefore I haven’t reflected upon that, I just need to pause, think reflect and then see whether I have acted on that type of initial bias. Same with personal which should be done from a, from a technical and methodological sense. For example, in Sega, we did an analysis with indies only female and male because we couldn’t gather as much information on on on non binary. But we did analysis of digital credit in Tanzania to see whether there was any, any potential buyers in digital credit, high currents. And we saw that even though women and men were has good payers, that access to credit was 20 point difference, that’s a much more credit given to men 20 more points to men than to women. For us that finally told us that the algorithm had some level of bias embedded. So what we recommended the authorities was, you need to have a better governance framework to analyze the results of those credit screening and credit scoring processes to see what type of bias is embedded in your processes, then, by looking at the results, so what type of training within institutions to be able to look at the results of the credit decisions, analyze the credit scoring and screening processes, and then see what changes need to be made, if you see results that are really biased? 

Lilien 51:12 

Okay, we’ve got a question for Jason, is the data available by geographic area of the country or by urban versus rural? 

Richardson 51:23 

So the the data does have, it does narrow down the location to the census track? In this report, we didn’t dive into that very much. But I think it’d be really interesting to look at the data that way, you know, especially in comparison with with literature on things like, you know, same sex couples by metro area, or by county or or neighborhood even, and see if there’s any interesting patterns. It’s part of the follow on work that I think that that that would be really great to get started on. A few. There was another question here, I think about the soji data. Yes. And and what would be the process to start at the Consumer Finance Protection Bureau oversees the home mortgage Disclosure Act data set. So it would be probably a rulemaking process that they would have to initiate. We’re working with them right now on a similar process for the implementation of Section 1071 of Dodd Frank, which will collect business loan data. So hopefully, this is something that we can we can start at, you know, agitating for as well.  

Lilien 52:31 

Okay, our next question is, how do we move past the narrative of the gay wealth myth? It’s clearly a barrier, especially in the financial services industry, how do we scale up some of the interventions mentioned? I know you’ve written about this, Lee. 

Badgett 52:49 

Yeah, I wrote a book about it 20 years ago, and it’s still there. So it’s obviously not simply a matter of having good data. But I think, you know, how do you get rid of, of a myth like that? It’s very hard. And I will say one thing as you might have noticed, I did not actually mention that myth, in one reason is that when you repeat things, like stereotypes, that’s what people often will remember. So I think it’s important that we shift the way we frame this conversation, in general towards thinking about, you know, what, what are the challenges that are faced? What are the barriers? What are the inequalities that we can actually see and measure and you know, kind of just scooting right around that I can I, you know, we could talk forever about why that myth exists. But the, the way to get rid of it is really to kind of, I think, sort of sidestep, talking about it more and more and starting to look at the data. 

Lilien 53:47 

I’ll say, I think a big problem is the media. When Caitlyn Jenner is presented as the most famous trans person in America, that is, that is not giving an accurate representation of the trans experience for most people. When the gay couples you see on sitcoms are white people living in obscene wealth, like unwilling grace and modern family, that gives people this idea that that’s how gay people live. And I think we need more shows like pose, which, unfortunately, is ending this season, which actually shows trans people of color scraping by to survive. You know, you don’t see that on TV a lot. And then TV is biased towards the wealthy in lots of ways. But but same sex couples, it’s pretty much always a fabulous apartment, fabulous clothes, living lives of decadence. And that’s just not the reality for most people in the community. All right. Another question is, how do we increase black indigenous people of color transgender representation in executive positions throughout the financial financial institutions? Do you think this type of diversity and inclusion will alleviate some of the obstacles faced by LGBTQIA borrowers? 

Davis 55:04 

I would say definitely, that just putting them in these positions can help. But it’s still there still such rooted systems in place that keep the transgender community oppressed. So having more people or having more hires can help. But it’s still we need a new system, because we don’t live by the regular rules that cisgender or even LGB cisgender people actually live by. So helping us create a new system or actually alleviate some of those obstacles face like having more understanding and compassion and not judging them, if they have a gig economy and unstable income. 

Richardson 55:47 

Yet, I just I’m sorry, to I just wanted to also know, they’re the financial services industry, it’s frequently been been research about their diversity and inclusion practices. There is, every three years or so the GAO does a study at the behest of Maxine Waters, looking at financial services, industry diversity, but they are currently only looking at race and gender. So one place to start would be, you know, Maxine Waters is going to is going to ask for that study again, which I think she’s done it, I think there are like four or five of them out there to be honest with you. Yeah, might be a good time to start, you know, asking for them to include, you know, sexual orientation as well, and transgender status and their questions as well. 

 Badgett 56:37 

Yeah, I think, sorry, I was gonna just jump in. I think Jason’s point is a really good one. I mean, I think we’re, we’re sort of like adding another realm of, of the economy where there’s potential discrimination, not just and credit, but I think the majority of the big companies that are followed, say, by the Human Rights Campaign and their corporate Equality Index, ask their employees of way, shape or form about their sexual orientation and gender identity. However, I have yet to actually see any of them kind of either do a clear analysis of that, that they that they’re willing to talk about, number one, or allow researchers to use their data to kind of look at, at how weather have weather policies are making a difference in terms of hiring and promoting and retaining LGBT people. Whether or not having them in those positions makes a difference, you know, farther down the line and their businesses in terms of who’s who’s getting who’s getting loans. So there’s a whole bunch of kinds of questions there that we should be pushing. And I love that idea of getting the GAO and Congress to kind of push financial services to to add these questions. Let me just also say that I do. I do think there’s a growing recognition, a growing recognition, again, as a federal government that these questions about data and LGBT people are really important, and many different kinds of levels. And so whenever we have the opportunity to kind of push them and say, Here’s where that data would really matter. Here’s what It would really help us to know these the composition, not just of the customers, but of the people who are employees. And we could put those things together, that would be very helpful. That’s a good reason why these statistical agencies should take action, and they listen for those kinds of questions for that kind of pressure. 

 Lilien 58:35 

All right, well, unfortunately, it’s time for us to wrap up. I’m gonna have closing statements from each of the speakers in the order in which they initially spoke. So we’ll be starting off with you, Professor Badgett. 

Badgett 58:46 

Okay, great. Well, this was really fascinating, all the different levels and thinking both within the United States and not and I guess, I would just say that, that I’m very encouraged about the the Houston now. And I hope we can also extend this conversation to thinking about data and other sorts of realms thinking about what Carlos is discussion about other countries, in, say, micro finance institutions, because there are starting to work on economic employment opportunities for people and, and developing countries, having access to micro loans is very important. The problem is that LGBTI people often don’t have families who can cosign for them. And so the, there are sort of all sorts of structural barriers, as well as kind of more social and cultural barriers that are going to that are going to make a difference. So I think, you know, we have, we have a lot of research ahead of us to try to figure out, you know, where these barriers exist, and then what we can do about them. So it’s great to start this conversation. Thanks. 

 Izaguirre 59:50 

Thank you very much. This has been a really very interesting panel, I have also learned a lot. And I’m very interested in following and looking at all the documents that have been shared. And I’ll be very happy to continue the conversation, I think there’s a lot that we need to talk more about several topics that we have raised already in terms of the importance of improving data collection, but also acting on data. And I think the role of the government authorities also in terms of pushing for more data analytics, data gathering, data collection and data usage. So I think there’s much more to talk about, I think, I agree. There’s not an uphill climb. But I think there’s some initial initiatives that have started and good the noise trend. So and even having this conversation right now, as part of this panel, I think it’s an important moment. And we should build on this. And thanks again, and happy to also have the roll back as part of our conversation. 

Davis 1:01:01 

Thanks. Once again, I would like to reiterate that transgender, the transgender community, and especially for transgender people of color, we are not numbers, we are actually people. And we are trying our best and hardest to thrive within this society, by having the opportunities are very limited and discriminate for our community. So I really want you to understand that to help create a least a new system in order to be flexible and provide more help for the transgender community be able to participate in normal activities of life of which we just wanted. Thank you. And thank you for having me. 

Richardson 1:01:42 

And I’m hoping that we can dive into this topic a lot more this year and follow up with more research, I’d like to see a much deeper analysis of the data, especially now that we’re about to have the 2020 mortgage data come out. So we’ll have three years of the enhanced data with more information on loan pricing and other things that can really help expand this. And ideally, at some point in time, we would be able to add soji data to the hunda data set as well and i and i think that would provide even more value. Thank you very much. 

 Lilien 1:02:13 

All right. Well, thanks so much. To our wonderful speakers. This has been a fascinating discussion. I wish it could go longer. I’d like to I’d like to also give a special thanks to three people who were very helpful in organizing the panel. Spencer Watson from clear which stands for the Center for LGBTQ economic advancement and research and Robert Chase and and Sophie yes person from the World Bank. So if you have if anyone has any questions about this panel or the community of practice, Karen put her email address in the chat and my email address. And stay tuned for pride month where we’re where we’re going to be celebrating NCRC and we will have an event in store. Bye, everybody. Thank you. 

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