Bank of America has entered into a settlement with the U.S. Housing and Urban Development over allegations the bank discriminated against pregnant women seeking loans, the government announced Monday.
The Charlotte bank will pay $45,000 to resolve claims that two couples who applied for mortgage refinancings in 2011 and 2012 were denied because the women were on maternity leave. The complaints stemmed from San Jose, Calif., and Humble, Texas.
The California couple said Bank of America pushed back the refinance closing date because of the maternity leave. They will receive $25,000. The Texas couple said the bank wouldn't consider any of the woman's income because she was on leave. They will get $15,000, and their realtor $5,000.
The housing department said Bank of America has made sure its new policies toward considering maternity leave in a loan application do not run afoul of discrimination guidelines.
“No lender should use a woman’s pregnancy or maternity leave as a reason to deny a mortgage loan,” acting assistant secretary for fair housing and equal opportunity Bryan Greene said in a statement. “We commend Bank of America for working cooperatively with the Department of Housing and Urban Development in reaching appropriate resolutions of these complaints."
Bank of America has long had a strong commitment to treating all applicants fairly, including women on maternity leave. For many years, Bank of America’s policies have expressly allowed applicants on parental leave to be approved for a loan without returning to work. Bank of America disagrees with the allegations in each of the complaints, and HUD has not alleged that Bank of America engaged in any wrongdoing. We elected to resolve these complaints on a voluntary basis in order to address customer service concerns and avoid further legal expenses. The policy changes that the Bank agreed to in these settlements amounted to clarifications of existing language, including some changes that required the approval of other government agencies.
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