It’s hard to imagine a time when credit card companies weren’t eagerly opening cards for all college students, but before Ruth Bader Ginsberg (RBG), if a woman wanted to open a credit card, the bank could require her to get a man to co-sign. And RBG didn’t just change personal finance for women – as a true feminist, she fought for men and women to both be fully human (in this case, with money).
With her passing earlier in September, we wanted to stop and acknowledge how she’s changed our lives, with a special emphasis on how she’s affected our wallets.
Here are the top four things you didn’t know about how RBG democratized personal finance.
Table of Contents:
1. RBG Fought to Make Women Equal to Men as Administrators of Estates
One of the cases RBG argued at the Supreme Court in 1971 might sound like it wouldn’t have much influence on personal finance, but RBG played the long game. She took on cases that steadily chipped away at unequal treatment between men and women under the law – cases that would lay the groundwork for bigger, systemic change. One of those cases is Reed vs. Reed.
When Sally and Cecil Reed’s adopted son died, both parents (who were separated) asked to be named the administrator of his estate. The Idaho Supreme Court determined that the father should be the administrator of the estate because an 1864 law gave men preference over women.
The case made it all the way to the Supreme Court. RBG wrote the brief that helped persuade the all-male Court to declare the Idaho law unconstitutional (at the time, she was a volunteer attorney for the American Civil Liberties Union or ACLU).
And while this might seem like a narrow issue – hopefully not many of us will ever be in the same position as the Reeds – it had tremendous legal implications in how the law viewed men and women. In fact, it paved the way for the Equal Credit Opportunity Act, up next.
2. RBG Made it Possible for Women to Open Bank Accounts, Credit Cards, and Get Home Loans Without a Male Co-signer
It might seem absolutely bonkers, but until the passage of the Equal Credit Opportunity Act (ECOA) in 1974, banks could refuse to open a bank account, a credit card, or a mortgage to an otherwise qualified woman if she didn’t have a man to co-sign.
And, according to Allen Abraham, a lawyer in New York, banks could even ask about a woman’s choice of birth control or her plans to have a baby – because the prevailing thought was that this made her less creditworthy. Why? Because a pregnant woman would leave the workplace (or be fired from her job, which wouldn’t become illegal until 1978) and no longer have an income.
Women faced a double-whammy when applying for a loan. Not only did they frequently make less than their male peers for the same work, “many lenders frequently discounted a woman’s wages by as much as 50 percent when setting loan limits,” said David Reischer, attorney and CEO of LegalAdvice.com.
If you know your RBG history, you’ll know that in 1974 she wasn’t anywhere close to being on the Supreme Court (nor was she in Congress to pass the ECOA, which made this type of credit discrimination illegal). So how did she influence its passage?
According to Reischer, her brief in the Reed vs. Reed case was “a pivotal turning point for courts recognizing equal treatment in financial related matters.” This is how RBG laid the groundwork for the ECOA (which was championed by many, including the ACLU and NOW).
The ECOA made discrimination illegal:
“It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction–(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract)…”
So even though she didn’t win a court case or write the legislation, her work enabled the ECOA. In turn, the ECOA opened up a world of possibilities to women and minorities – allowing them access to bank accounts, credit cards, and home loans.
3. RBG Fought for the Equality of Men Too – Winning Men Caretaker Tax Deduction Rights
RBG didn’t just fight for women. She fought for men and women to be treated equally.
In one case, Charles Mortiz wanted to use a tax deduction for hiring a caretaker for his 89-year-old live-in mother. He traveled occasionally for work, but as the prime caretaker of his mother, who was a wheelchair user, he needed help. He hired a caretaker and paid her $1,250. He wanted to apply the caretaker deduction and deduct $600 from his taxes.
Because he wasn’t a woman and had never been married, the IRS wouldn’t allow him to take the deduction.
The law in 1968 specified “a deduction expenses paid during the taxable year by a taxpayer who is a woman or widower, or is a husband whose wife is incapacitated or is institutionalized, for the care of one or more dependents (as defined in subsection (d)(1)), but only if such care is for the purpose of enabling the taxpayer to be gainfully employed.” But the law granted no such rights to unmarried men.
He took his case to court and lost.
That’s where RBG comes in. Alongside her husband, the tax lawyer Martin Ginsburg, RBG represented Mortiz when he appealed to the Tenth Circuit to argue that the IRS code was unconstitutional. They won the case.
In 1971, Section 214 of the IRS code removed the gender and marital status requirement for tax deductions on care for dependents, making unmarried men equal to women at tax time.
Related: Tax Benefits for Individuals
4. Men are Entitled to Survivor’s Benefits
In one of her most famous cases (it was in the movie “On the Basis of Sex”), RBG again argued that men were being unfairly treated under the law.
When Stephen Wiesenfeld’s wife Paula – a high school teacher who was the primary income earner for the family – died, it forced Stephen to cut back work at his consulting business to take care of his son. He applied for Social Security survivors’ benefits – both for him and his son. He wanted to stay home and take care of his child.
While his son received benefits, the law denied him the same benefits. But if he had been a widow, he would have gotten $206 a month.
Related: How Becoming a Widow Affects Credit
In this case, the law only applied to widows, not widowers.
RBG represented Stephen Wiesenfeld in Weinberger v. Wiesenfeld – winning the rights for all widows/widowers to survivor benefits.
Survivor benefits are part of Social Security. And according to the Center on Budget and Policy Priorities, Social Security made up 23 percent of the 2019 federal government’s budget. So, we want it to be applied equitably.
Learn More: The Definitive Guide to Social Security Benefits
Legal decisions that might seem tangential to our daily personal finances can take on great meaning, especially when those decisions are made by a brilliant strategist. RBG might be more famous for some of her dissents, but her impact on the personal finances of all Americans was profound.
Want to Know More?
That line about banks asking what kind of birth control a woman was using or when she planned on getting pregnant – that comes from the 2016 Brooklyn Journal of Corporate, Financial & Commercial Law (page 478).
It was until 1978 with the passage of the Pregnancy Discrimination Act that it became illegal for employers to fire a woman because she was pregnant (which is not the same thing as firing a pregnant woman because she’s not doing her job – that’s still legal).
Read more about the Equal Credit Opportunity Act here.
Read more about tax case that was later turned into a movie.
Do you think you’ve been the victim of creditor discrimination? Read more about what steps you can take here.
That $206 figure – that’s what Stephen Wiesenfeld was fighting for. Read about it in his own words.
Want to know more about how much Social Security accounts for the federal budget or how else your federal taxes are used – check out this brief from the Center on Budget and Policy Priorities.