HUD Settles Fair Housing Act Claims Against Bank

Banking  •  FHA  •  HUD  •  Mortgage

On July 29, 2016, the Department of Housing and Urban Development (HUD) announced a settlement with a bank concerning allegations that they denied loan approval to a woman on maternity leave in violation of the Fair Housing Act (FHA).

The woman had applied for a home equity line of credit, but the bank allegedly told the her that she would have to return to work before the bank would approve her application—despite the fact that the woman was receiving her full pay.  HUD became aware of the incident after the woman filed a complaint alleging discrimination in violation of § 805 of the FHA.  Under the FHA, it is unlawful to discriminate in the context of the sale or rental of a dwelling on the basis of sex or familial status, which includes discrimination against pregnant women or parental leave.

Pursuant to the agreement, the lender agreed to (1) pay the woman applicant $40,000, (2) provide fair housing training to its staff, (3) adopt a policy concerning parental leave clarifying that all loan products should be made available; and (4) make a $75,000 donation to a HUD-approved fair housing or advocacy organization.

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