Recently the U.S. Department of Housing and Urban Development (HUD) announced that it has entered into an Initial Decision and Consent Order with American Bank, resolving HUD’s charge that the Rockville, Maryland-based lender discriminated against applicants with disabilities when it allegedly required applicants to provide documentation regarding their disabilities and attempted to obtain information about the nature and extent of those disabilities. Cases similar to this are being common.
HUD charged the lender with unlawful discrimination based on disability. A couple filed a complaint with HUD alleging that the bank required the husband, who has a permanent disability, to provide Social Security Administration documentation proving his disability-related income for the past two years. The letter the man provided had no end date, and stated that his disability income would continue unless the man’s medical condition improved. However, the bank, and its senior mortgage banker, allegedly required the applicants to provide additional medical documentation proving that they would continue to receive disability income for at least three years.
Under the Consent Order, American Bank will pay the couple $25,000, adopt a written policy addressing the income verification requirements for home mortgage loan applicants who receive disability income, and provide fair lending training, including training regarding disability income, to newly hired employees. The Bank will also identify the approximately 2,900 applicants that applied for a loan to purchase or refinance a home between January 1, 2011, and December 31, 2013, and listed Social Security Disability Insurance, Social Security, and/or short-term or long-term disability insurance as a source of income. A third-party administrator hired by the bank will review each application file and identify everyone the bank required to provide information about their medical conditions for income verification purposes. Those applicants may be eligible to receive up to $5,500 in compensatory damages.
A copy of the Initial Decision and Consent Order is available here.
