Fifth Third Bancorp, Inc. has agreed to pay $1.52 million in a settlement with the U.S. Department of Justice, which charged that Fifth Third discriminated against loan applicants based on disability status.
The discrimination lawsuit against Fifth Third came about as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD). The complaint alleged that the bank's mortgage unit violated the federal Fair Housing Act and the Equal Credit Opportunity Act by requiring some loan applicants to produce doctors' letters to verify Social Security Disability income.
“Today’s announcement holds lending institutions accountable for their actions, and is a reminder that every American has the right to apply for a home loan and live in the community of their choice,” HUD Assistant Secretary for Fair Housing and Equal Opportunity Gustavo Velasquez said.
As part of the settlement, Fifth Third agreed to train its underwriters and loan officers and monitor loan applications to ensure that applicants are not requested to provide doctors' letters.
“My office is proud to have participated with our fellow attorneys from the Department of Justice in reaching a resolution of this matter that protects those with disabilities from having this unnecessary, inappropriate and illegal intrusion into the most private of their affairs," said Michael Moore, U.S. Attorney for the Middle District of Georgia
According to the Department of Justice, the Cranbrook Mortgage Corporation, a second defendant in the case, has revised its underwriting practices and will pay $2,000 in compensation to HUD loan applicants. Cranbrook will also conduct training of underwriters and loan officers similar to that which Fifth Third agreed to conduct.
“Today’s settlement continues the shift away from an industry practice that violates the Fair Housing Act and the Equal Credit Opportunity Act,” Acting Assistant Attorney General Molly Moran for the Civil Rights Division said.
Fifth Third was fully cooperative with the investigation of its lending practices conducted by the Department of Justice, according to the department. Fifth Third said in a statement that it was pleased to settle and "remains committed to making mortgages available on a fair and equitable basis."
This was not the first time in recent history that Fifth Third has agreed to a lawsuit settlement. In April 2013, the Cincinnati-based bank agreed to pay a total of $16 million to a number of plaintiffs, including Local 295/Local 851 IBT Employer Group Pension Trust and Welfare Funds, District No. 9, I.A. of M. & A.W. Pension Trust, and Edwin B. Shelton, for allegedly misrepresenting itself in the subprime securities market.