For most of human history, women have been financially dependent on men. This was not by choice — women simply didn’t have the right to control their own finances. Universal access to banking, credit and mortgages is still relatively new.
In October of next year, the Equal Credit Opportunity Act of 1974 will mark its 50th anniversary. This landmark legislation prohibits lenders from discriminating against a borrower on the basis of gender or marital status, and it was amended in 1976 to protect against other forms of discrimination, including race, age and religion.
“Mortgage professionals, as the face of the business, have a responsibility to champion equal access and financial literacy.”
The impact of the ECOA is evident today. Single women now outnumber single men as homebuyers. Women are earning more bachelor’s degrees than men and their average credit scores are identical. But obstacles still exist as women face pay gaps, sexism, harassment and a gender gap in financial literacy.
As women have evolved from second-class citizens to breadwinners, the mortgage industry also needs to evolve to serve and educate them with safety and respect. Mortgage professionals, as the face of the business, have a responsibility to champion equal access and financial literacy.
Financial history
In 1853, suffragist Susan B. Anthony wrote that a “woman must have a purse of her own, & how can this be, so long as the wife is denied the right to her individual and joint earnings.” By 1890, 20% of women were wage earners. And by 1900, all states had passed laws allowing married women to retain ownership of property and real estate.
This allowed them some control over their wages, but banking services were nearly impossible to access. A few banks ran so-called “ladies’ departments,” and in 1919, the First Woman’s Bank opened in Tennessee. Still, these services were available almost exclusively to upper-class white women, and it wasn’t until the 1960s that women were given legal access to banking products.
Hurdles continued. Even with legal access to bank accounts, lines of credit and loans, most institutions still required a male co-signer. This largely prevented independent women — single, divorced or widowed — from participating.
The 1970s were a turning point for women’s rights, including financial rights. In 1971, the Supreme Court unanimously ruled that “dissimilar treatment on the basis of sex” between men and women was unconstitutional. Amendments to the Civil Rights Act protected women from discrimination in hiring and firing. And in 1974, the ECOA was passed, barring lenders from requiring a male co-signer and limiting them to only consider creditworthiness when reviewing applications.
Financial literacy
To take advantage of access to financial products, including mortgages, clients must be educated about them. A TIAA Institute study found that women lag behind men in financial literacy while Black and Hispanic women lag behind their white peers. The study also found that financial wellness was higher among those with higher financial literacy — meaning that the more educated you are, the more creditworthy you’ll be.
Picture a divorced woman in the rapidly changing world of the 1970s and ‘80s. Most of her adult life was spent sharing finances with her husband, who had control of the accounts. She now has to figure out how to support herself for the first time, and despite the pain and hardship she experienced in her marriage, she asks her ex-husband for an alimony increase because she needs money.
You might be confused by this approach. Why would she ask her ex-husband for money when she could start working or reach out to family for support? This woman had the means to overcome any financial hurdles she faced. The problem was, she didn’t know her options, and she was frozen in a certain mindset — almost as if financial independence wasn’t even an option to consider.
This perspective likely sounds foreign to a mortgage professional with extensive financial education, but it was a reality for millions of women, for many years. Women today make more money than ever, but they still earn less than men. They have improved their financial literacy, but that isn’t equal either. Mortgage originators can help bridge this gap so that women can take control of their financial destiny through education.
Response to misogyny
Recently, a video was posted to Instagram discussing the profound changes that occurred due to the passage of the ECOA. The video highlighted the liberation women experienced when they were no longer required to have a male co-signer for a credit card and mentioned the increase in single female homebuyers.
Responses to the video were far from expected. The comments section hosted an onslaught of derogatory remarks, rife with misogyny and offensive generalizations about women’s spending habits and financial means.
Women thriving in male-dominated industries are not strangers to what some consider socially acceptable misogyny. This manifests in meetings where men heavily outnumber women, with vague innuendos and/or outright sexist comments. It’s expected and tolerated, so women go into these situations prepared. The initial approach is observation — to look for contextual clues of who will regard them as an equal and who might not. Then they handle conversations accordingly and move on.
“When driven by a clear vision and purpose, external criticism loses its power. Focus on the betterment of your community.”
Although women often possess the resilience to handle such situations in a professional setting, more direct online vitriol — like the comments on that video — are not only personally hurtful but also a stark reminder of the misogyny still present in some circles. A woman not normally exposed to such toxicity may not be prepared to combat it. But she certainly would not want to perpetuate it either. Her first reaction might be to close the comments or take down the video altogether.
But she should not let this undermine the video’s message or erase positive responses to it. The video was a worthy history lesson highlighting the importance of financial equality. It was intended as encouragement to other women and its message shouldn’t be silenced by anonymous bullies. The creator left the video up, and decided to rebuke and refute. The disgusting comments finally stopped and the supportive ones started showing up. This reaffirmed the importance of the video’s message: advocate for financial equality and challenge stereotypes.
This experience is not unique: According to the Pew Research Center, 41% of Americans have experienced online harassment. Sixty-one percent of women polled thought it was a major problem, with 48% of men in agreement. Social media platforms have even been called out by international governmental organizations as a “conveyers of sexist hate speech.”
If this can affect something as simple as a financial education video, it should serve as a call to action for mortgage professionals who don’t conform to dated gender norms. You are a front-line resource for equal access, education and financial literacy.
What’s next?
Although many originators serve a diverse clientele, female clients appreciate working with someone who understands their unique challenges. In a 2013 Insured Retirement Institute study, 70% of women said they prefer to work with a female financial adviser.
A 2022 survey by Edelman Financial Engines shed more light on this statistic. In the Edelman study, 82% of people said they prefer to work with a financial adviser who shares a common background or beliefs. Women want to work with women because they feel safer. They aren’t placed in yet another situation where time and energy are spent deciding whether a person’s smile is genuine, or if it’s hiding opinions like those in the Instagram comments section.
Women are mothers, sisters, wives, daughters and friends. They make up roughly half of every community, they are breadwinners, and they deserve the same rights and privileges as men. Any mortgage originator can make their business a safe and comfortable place for women by actively advocating for them. Explore your own biases and thoroughly educate your female clientele to help them get approved. Ally yourself professionally with women’s groups, or host workshops for young, single people of all genders.
Many originators already contribute to this transformation by sharing their knowledge on platforms like social media. As your influence grows, however, so may the backlash from those invested in maintaining the status quo. Standing out invites scrutiny and attempts to diminish your voice, but you cannot be silenced.
When driven by a clear vision and purpose, external criticism loses its power. Focus on the betterment of your community. Your voice matters and your community needs your insights. By embracing authenticity and refusing to conform, you ensure that your message of financial empowerment reaches those who truly need it.
Resist the urge to shrink back. You deserve to be heard and your community needs to hear what you have to say. The journey to financial equality continues and you, as financial professionals, must not let bullies deter you from the path of progress. ●
