WORTH WATCHING – BOA DISCRIMINATION CASE

The U.S. Department of Housing and Urban Development (HUD) recently announced it has charged Bank of America, N.A., and two of its employees with violating the Fair Housing Act by discriminating against prospective Hispanic mortgage borrowers in Charleston, South Carolina.

The National Fair Housing Alliance (NFHA) filed a complaint with HUD claiming the bank discriminated against prospective borrowers who are Hispanic by failing to provide them with information about loan products or by offering them loan products with less attractive terms, as compared to prospective borrowers who are not Hispanic. Prior to filing its complaint, NFHA conducted a series of tests comparing the treatment of Hispanic and non-Hispanic testers who posed as prospective borrowers at a Bank of America branch in Charleston, South Carolina. ┬áHUD’s charge alleges that these tests showed that the bank discriminated because of national origin by treating the Hispanic testers less favorably than the non-Hispanic testers.

The case will be heard in federal district court. If it is determined that illegal discrimination has occurred, a judge may award actual and punitive damages, order injunctive or other equitable relief to deter further discrimination, and order that defendants pay NFHA’s attorney fees.

All are encouraged to read the Notice of Charges. The Notice provides a template for how not to treat applicants to assure fair treatment. It is interesting to note that the clearly disparate treatment involved “testers,” not real applicants. Many cases of this type get settled before making it to court. Will BOA settle? If the case makes it to court how will the court rule when the victims are testers and will any significant damages be awarded?

The Notice of Charges is available at: https://portal.hud.gov/hudportal/documents/huddoc?id=16bankofamerica.pdf

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