Bank of America settles Fair Housing Act discrimination claims and agrees to pay damages to disabled victims

Sept. 2019 - A Bank of America branch location at 4400 Veterans Memorial Highway in Holbrook, NY.

HOLBROOK, NY ( / — Bank of America has settled Fair Housing Act discrimination claims and agreed to pay damages to disabled victims, according to a settlement announced today by the Department of Justice U.S. Attorney’s Office.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Eric S. Dreiband, Assistant Attorney General for Civil Rights, filed a civil complaint and proposed settlement agreement with Bank of America, N.A. today to resolve claims that the company engaged in a pattern or practice of discrimination on the basis of disability, in violation of the Fair Housing Act.

According to the civil complaint, the United States alleged that, between January 2010 and 2016, Bank of America maintained a policy of denying mortgage loans and, between January 2010 and 2017, home equity loans, to adults with disabilities who were under legal guardianships or conservatorships.

“This settlement ensures that Bank of America will no longer discriminate against people with disabilities when issuing mortgage and home equity loans, and compensates the victims for their losses,” said Acting United States Attorney DuCharme.  “Our office is committed to standing up for the rights of individuals with disabilities and taking action when necessary to vindicate those rights.”

“No one in this free country should be denied access to the American dream merely because of a disability. The unalienable right to pursue happiness extends to all people, including those with disabilities, and purchasing a home is one way many people exercise this right,” said Assistant Attorney General Dreiband of the Civil Rights Division. “The Fair Housing Act prohibits banks from denying mortgage loans and other housing-related credit to people because of their disabilities, and this department will hold accountable those lenders who engage in such illegal conduct. Today’s settlement provides compensation to victims of unlawful discrimination and requires Bank of America to apply non-discriminatory policies in deciding which applicants will receive loans.”

Bank of American has ended its practice of denying mortgage and home equity loans to adults with disabilities under guardianships or conservatorships, according to the U.S. Attorney’s Office. The terms of the settlement require Bank of America to pay approximately $300,000 to compensate victims of its conduct. The settlement also requires Bank of America to maintain the new, non-discriminatory loan underwriting policy and train its employees on the new policy. In addition, Bank of America must monitor its loan processing and underwriting activities to ensure compliance with the Fair Housing Act. Bank of America will report to the United States every six months for a two-year period regarding its compliance with the terms of the settlement and on any complaints it has received regarding any instance in which a mortgage loan application was denied to an adult applicant represented by a legal guardian or conservator.

Bank of America cooperated with the United States’ investigation and agreed to settle this matter without contested litigation, according to the U.S. Attorney’s Office. By entering this agreement, Bank of America does not admit, and expressly denies, any liability, wrongdoing, or non-compliance with the provisions of the FHA, the U.S. Attorney’s Office noted.

Bill Halldin of Bank of America provided the following statement to OnSachem.

“Bank of America has an outstanding record of supporting clients and employees with disabilities, including being recognized with a top score in the Disability Equality Index for four years.

• Due to concerns about possible exploitation, the bank for a period of time limited mortgage loans for people with guardians.

• We updated our policies more than three years ago to expand access to such loans.

• Our Disability Advisory Council works to consistently improve and further develop our strategy to serve employees, clients and communities.”

Bank of America’s Halldin pointed to the following two excerpts from the settlement:

• “Bank of America asserts that it did not unlawfully discriminate against any person based on a disability or otherwise, and asserts that the allegations in the Complaint concern previous underwriting guidelines, which it has since voluntarily changed, that were implemented by the Bank after the financial crisis of 2009-2010 for the purpose of protecting at-risk applicants from financial exploitation.”

• “Bank of America maintains that it did not, and does not, unlawfully discriminate on any prohibited basis in connection with its mortgage lending business, and is deeply committed to ensuring that all individuals—regardless of race, color, religion, national origin, ethnicity, sex, marital status, age, receipt of income from public assistance programs, good faith exercise of rights under the Consumer Credit Protection Act, familial status, gender identity, sexual orientation, handicap or disability—are treated equally. Starting in February 2016, the Bank voluntarily changed its underwriting guidelines at issue for its first mortgage line of business to remove restrictions on loans to adult applicants represented by a legal guardian or conservator. The Bank later voluntarily made this change for its home equity lines of business in May 2017. Bank of America asserts that during the time period in question, it did make mortgage loans to persons with handicaps and disabilities without restrictions, including some adult applicants who had legal guardians or conservatorships.”

This case is being handled by Eastern District of New York Assistant U.S. Attorney Rachel G. Balaban and Deputy Chief Lucy G. Carlson and Trial Attorney Katherine A. Raimondo of the Civil Rights Division Housing and Civil Enforcement Section.


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