Bank of America (BAC) has agreed to compensate mortgage loan applicants who alleged the bank discriminated against some borrowers who received disability income.

The U.S. Justice Department said Thursday the nation's second-largest home lender would pay $1,000, $2,500 or $5,000 to would-be borrowers who were asked to provide a letter from their doctor to document the income they received from Social Security Disability Insurance.

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