BofA settles federal fair housing discrimination claim for $300K

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Bank of America has settled a fair housing complaint with the federal government over allegations of denying mortgages and home equity lines of credit to adults with guardians.

The period covered by the settlement with the U.S. attorney for the Eastern District of New York was between January 2010 and February 2016 for mortgage loan applicants, and between January 2010 and May 2017 for home equity loan applicants. All of the applicants involved were adults under legal guardianship or conservatorship.

After the Great Recession, citing possible exploitation, BofA instituted a policy that put limits on loans to persons in guardianship, a bank spokesman said. That policy was ended in 2016, before the federal investigation began.

"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," the spokesman said. "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," the spokesperson continued. "Our Disability Advisory Council works to consistently improve and further develop our strategy to serve employees, clients and communities."

The settlement agreement notes that "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."

Under the terms of the agreement, BofA will pay each applicant $4,000. The spokesman said 75 people are covered by the agreement, for a total of $300,000.

BofA cooperated with the investigation and agreed to settle this matter without contested litigation, a press release from the Eastern District of New York said, adding that the bank did not admit and expressly denies any liability wrongdoing, or noncompliance with the provisions of the Fair Housing Act.

Moreover, the agreement itself noted that it "is a compromise of disputed claims. The United States acknowledges the substantial cooperation of Bank of America throughout its investigation regarding the matters addressed in this agreement."

The settlement requires BofA to maintain the nondiscriminatory loan underwriting policy and train its employees on it; monitor its loan processing and underwriting activities to ensure compliance with the Fair Housing Act; and report to the government every six months for a two-year period regarding its compliance, the Eastern District's release said.

"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," Eric Dreiband, assistant attorney general of the civil rights dDivision, said in the June 23 press release.

"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 nondiscriminatory policies in deciding which applicants will receive loans."

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