Utah’s second-largest credit union has settled allegations that it discriminated against prospective mortgage borrowers because they were on maternity leave.
Home lenders are prohibited by the Fair Housing Act from discriminating against a loan applicant who is pregnant or on family leave.
Violations of the Fair Housing Act in maternity cases have cost lenders more than $2.2 million in settlements and judgments over that past three years.
On Wednesday, the Department of Housing and Urban Development announced that a settlement was reached with another mortgage lender: Mountain America Credit Union.
The alleged violations were brought to HUD’s attention by a married couple who settled their own complaint last year.
According to HUD, the West Jordan, Utah-based financial institution claims it was just following its mortgage insurer’s guidelines. Those guidelines reportedly allowed regular pay for women on maternity leave to be considered only if they returned to work before the loan closed.
That M.I. company was CMG Mortgage Insurance Co., which, itself, reached a $30,000 conciliation agreement with HUD in October 2013 over alleged Fair Housing Act violations in connection with its policies on maternity leave.
In today’s announcement, HUD said that Mountain America — the 35th largest credit union in the nation and second biggest in Utah — has reached a conciliation agreement that has it paying $25,000 to settle the allegations of discrimination.
Impacted borrowers will receive $10,000, while $15,000 will go to a qualified organization for fair lending education.
In addition, Mountain America will adopt a parental leave policy that is compliant with the Fair Housing Act and will conduct training on the new policy and its application for employees.
“The birth of a child, a joyous event for a family, should not become the basis for denying that family a home mortgage,” HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity Bryan Greene said in the statement. “HUD will continue to enforce fair housing laws to ensure that no family is denied the opportunity to buy a home because of maternity, paternity, or pregnancy leave.”
The agreement is just one in a string of actions that have cost lenders more than $2.2 million since 2011.
| Date | Company | Amount |
| Nov 2013 | Bank of America | $45,000 |
| Oct 2013 | CMG Mortgage Insurance Co. | $30,000 |
| May 2013 | SunTrust Mortgage Inc. | $36,000 |
| Apr 2013 | Primary Residential Mortgage Inc. | $15,000 |
| Feb 2013 | PNC Mortgage | $13,000 |
| Nov 2012 | Mortgage Guaranty Insurance Corp. | $1,015,000 |
| Sep 2012 | Land Home Financial Services | $20,000 |
| Jun 2012 | Bank of America Corp. | $261,180 |
| Apr 2012 | Magna Bank | $14,085 |
| Apr 2012 | Home Loan Center Inc. | $15,000 |
| Jun 2011 | Cornerstone Mortgage Co. | $765,000 |
