PNC Financial Services Group (PNC) has agreed to review mortgage loan applications in eight Northeastern states as part of a settlement over allegations that the company discriminated against a prospective borrower who was on maternity leave.
The settlement was announced Wednesday by the U.S. Department of Housing and Urban Development.
It requires PNC's mortgage unit to review two years of applications for residential mortgages guaranteed by the U.S. Department of Veterans Affairs by applicants in New York, Pennsylvania, Connecticut, Massachusetts, Rhode Island, Maine, Vermont and New Hampshire.
If PNC identifies borrowers whose applications were denied because they were pregnant or on maternity leave, it will pay each of them $7,500, according to a HUD news release. The bank also agreed to provide fair-lending training to residential mortgage staffers.
The federal government alleged that PNC's policies and procedures regarding people on maternity leave violated the Fair Housing Act, a charge that the bank denies.
The case grew out of a mortgage loan application by a Navy veteran and her husband. The couple, whose names were not released, was looking to buy a house in Newington, Conn.
Anita Visconti, a senior loan officer at PNC Mortgage, told the woman that she would not be able to close on the home until she provided a month's worth of pay stubs, according to the woman.
That would have required the woman to end her maternity leave early, and closing on the sale a month later resulted in a $3,000 price increase, the woman alleged.
In the settlement, PNC asserted that the documentation in the couple's loan file contradicted the allegations. PNC stated that it was entering into the settlement to avoid additional expenses, while agreeing to pay $15,000 to the couple.
In an emailed statement to American Banker, PNC said it "is committed to serving everyone, regardless of family status. We value the contributions of military families, and we are working to strengthen our ties with them."