The charge of discrimination by the Department of Housing and Urban Development that began in February has been settled. The U.S. Department of Justice alleged that Bank of America, the second-largest bank in the U.S., had “imposed extra burdens” on those who used their Social Security disability insurance income to qualify for home loans. These people were also required to provide letters from physicians to document the income.

The overall cost of the settlement is unknown, but Bank of America has agreed to pay $1,000, $2,500 or $5,000 to loan applicants asked to provide the letters who were eligible for the loans. An additional 25,000 loan applications are being reviewed for other possible victims, as well as to improve the training of loan officers and underwriters.

The financial awards to these loan applicants may help to ease some financial burden, but the fact of the matter is that the bank discriminated against applicants. They were required to jump through additional hoops in order to qualify for loans due to their disability status. Invasive requests for proof of disability from the bank when applying for credit is entirely inappropriate, as the Department of Justice has found.

Bank of America has since modified its documentation policies to adhere to the Housing and Urban Development standards. In the future, the bank will follow them and remain true to the Fair Housing Act and the Equal Credit Opportunity Act. Disabled people are just as entitled to homeownership as any other person, and should only be required to provide as much information as any other, instead of facing discriminatory practices.

Source: Reuters, “BofA settles U.S. probe related to disabled borrowers,” Rick Rothacker and Jonathan Stempel, Sep 13, 2012