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U.S. Bank Settles over Alleged Lending Discrimination

numberone-moneyU.S. Bank has reached a settlement with a housing regulator over allegations the bank discriminated against a Native American couple in denying them a refinance.

In a complaint filed with HUD, the couple alleged U.S. Bank and its appraiser, Red Sky Risk Services, turned down their refinance application last year, informing them that the bank couldn't make the loan because their property was located on a reservation and could not be appraised.

Located on the Turtle Mountain Indian Reservation in North Dakota, the property is considered to be held in "fee simple," according to HUD, meaning the couple holds the title without restriction.

In denying their loan on that basis, the couple alleged U.S. Bank violated the Fair Housing Act, which prohibits lenders from making lending decisions or terms based on race, color, national origin, sex, religion, family status, or disability.

"A person's race and national origin have no effect on their credit worthiness," said Gustavo Velasquez, HUD's assistant secretary for fair housing and equal opportunity. "HUD will continue to work to give all families an equal opportunity at homeownership by ensuring that lenders meet their obligation to comply with the Fair Housing Act."

Under the settlement's terms, U.S. Bank agreed to pay the couple's U.S. Bank credit card balance, amounting to nearly $11,500. The bank also agreed to approve their refinance application at the same interest rate and terms under which they originally applied in May 2013.

In addition, both U.S. Bank and Red Sky Risk Services agreed to change their policies and train their employees regarding mortgage loans on land located within Native American reservations in order to be consistent with the Fair Housing Act.

In the agreement, U.S. Bank and Red Sky denied intentionally discriminating against the complainants and did not make any admission of violating the Fair Housing Act.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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