The Department of Housing and Urban Development announced a discrimination settlement with Bank of America, though the amount is just a drop in bucket compared to other settlements at the financial services giant.
HUD said that BofA discriminated against two sets of borrowers — one in San Jose, Calif., and the other in Humble, Texas — when it allegedey denied credit to the couples because the wives were on maternity leave.
Such discrimination is a violation of the Fair Housing Act, which prohibits mortgage lenders from denying credit because a woman is pregnant or on family leave.
Both couples were applying for refinances.
The California couple claim they were told to move back the closing date because of the maternity leave.
The Texas couple were denied altogether and closed with a different lender. They claim that once the BofA loan originator was advised that the company was violating the Fair Housing Act, he changed the reason for the denial.
HUD said it reached a conciliation agreement with BofA resolving the allegations.
BofA will revise its policies to allow applicants on parental leave to be approved for home loans without first returning to active work status. It will also conduct fair lending training for its employees
The agreement will cost the Charlotte, N.C.-based bank $45,000 — including payments of $25,000 to the California couple, $15,000 to the Texas couple and $5,000 to a Texas Realtor.
The amount of the settlement is insignificant compared to the billions of dollars the company has forked over to settle alleged sins at Countrywide Financial Corp., which it acquired in 2008.
Just this year alone, litigation expense at BofA totaled $3.8 billion through September.
Last month, a jury in U.S. District Court for the Southern District of New York found BofA liable for faulty loans Countrywide sold to Fannie Mae and Freddie Mac.
HUD, which has announced several recent maternity settlements, commended BofA for “working cooperatively” in resolving the complaints.
“Bank of America took affirmative steps to work with government regulators to ensure that its new policies did not conflict with lending guidelines,” HUD stated.
