The ""Justice Department"":http://www.justice.gov/ announced Thursday that it has reached a settlement with ""Bank of America"":https://www.bankofamerica.com/ over allegations of loan discrimination against disability income recipients.[IMAGE]
The bank was accused of violating the Fair Housing Act and the Equal Credit Opportunity Act by asking disabled mortgage loan applicants to provide letters from their doctors to document the income they received from Social Security Disability Insurance (SSDI). Some applicants were asked to provide more detailed medical information to document their income.
BofA agreed to maintain revised policies, conduct employee training to ensure that all applicants are treated lawfully, and pay compensation to victims to resolve the allegations. The terms of the settlement also require the bank to pay $1,000, $2,500, or $5,000 to eligible applicants who faced possible discriminatory practices based on disability income.[COLUMN_BREAK]
BofA cooperated with the investigation and agreed to settle without contested litigation.
The bank will hire a third party administrator to search through approximately 25,000 loan applications involving SSDI income to identify other possible victims.
Thomas Perez, assistant attorney general for the Justice Department's Civil Rights Division, said the case highlights an unfair practice that may not have been receiving enough attention.
""Loan applicants with disabilities should not be subjected to invasive requests for medical information from a doctor when they are applying for credit,"" Perez said. ""Today's settlement shines a light on a practice that violates the Fair Housing Act and the Equal Credit and Opportunity Act.""
The lawsuit arose after three loan applicants filed complaints through HUD. After an investigation of the complaints, HUD started a broader investigation of BofA's practices, during which the bank revised its policies for documenting disability income. The case was then referred to the Justice Department.
The initial three complainants will receive a total of $125,000 to compensate them for costs associated with their loan applications.
""This settlement confirms the resolve of this office to protect the civil rights of citizens in our district from illegal discriminatory practices,"" said Anne Tompkins, U.S. Attorney of the Western District of North Carolina, where the settlement was filed. ""Discrimination in lending has profound consequences that will not be tolerated.""