Bank of America charged with discrimination

A federal housing agency has charged one of the nation's largest banks with requesting additional and unnecessary information from homebuyers with disabilities. 

The Housing and Urban Development Department (HUD) said Monday that it is charging Bank of America with discriminating against homebuyers with disabilities, alleging that the bank "imposed unnecessary and burdensome requirements" by asking some borrowers for proof of their disabilities from their physicians and continuance of Social Security income before approving loans, after first denying them. 

“Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law,” said John Trasviña, HUD assistant secretary for Fair Housing and Equal Opportunity. 

“Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible," he said. 

The matter is being handled by the Justice Department.

In a statement sent to The Hill, Bank of America said "there is no basis to allege that Bank of America has engaged in a systemic practice of discriminating on the basis of disability in connection with mortgage lending"

The "individual cases cited by HUD involve inconsistencies between FHA and conventional standards concerning underwriting procedures for determining the duration of disability income awards," the bank said. 

"In each instance, we followed the stricter FHA standards and, importantly, all three borrowers received funding for their loans from Bank of America," the statement said. 

Under the Fair Housing Act, it is illegal to discriminate in the terms and conditions of a loan to an individual based on a disability, including imposing different application or qualification criteria. It is also illegal to inquire about the nature or severity of a disability except in limited circumstances, HUD said. 

HUD’s charge is based on a “Secretary-initiated investigation,” that includes two complaints filed by borrowers in Michigan and Wisconsin who allege that Bank of America required them to provide personal medical information, documentation regarding their disability and proof of continuance of their Social Security payment to qualify for a mortgage.  

This story was updated at 2 p.m.