By Ajong Mbapndah L
When it comes to home ownership, banks are the key for getting loans. And laws are in place to ensure that banks engage in practices that are fair.
The federal Fair Housing Act prohibits banks and others from discriminating against people on the basis of race, national origin, religion or sex.
The Equal Credit Opportunity Act forbids discrimination on race, religion, sex, marital status and other characteristics regarding any aspect of a credit transaction.
Even so, some financial institutions violate the law. And when they do, there is a price to pay. The U.S. Department of Justice and advocacy groups are increasingly on the heels of banks that engage in discriminatory practices.
Under the FHA, the Justice Department says it “may bring lawsuits where there is reason to believe that a person or entity is engaged in a ‘pattern or practice’ of discrimination or where a denial of rights to a group of persons raises an issue of general public importance.”
On its website, the Justice Department highlights instances in which it has matched its words with action:
¶ In October, the government reached a settlement with Chevy Chase Bank, now Capital One, on charges that the company exhibited “a pattern or practice of discrimination on the basis of race and national origin in violation of the Fair Housing Act and ECOA.” Under the settlement, the company will pay $2.85 million to about 3,000 African Americans and Hispanics who were victims of discrimination.
¶ In 2012, Wells Fargo agreed to pay $175 million to settle a case in Baltimore alleging that African Americans and Hispanics were charged more expensive loans and fees.
¶ In 2011, litigation initiated by the Justice Department forced Countrywide to pay about $355 million for practices that were discriminatory to more than 10,000 African Americans and Hispanics.
Some settlements total in the billions. Last January, 10 banks – including Bank of America, JP Morgan Chase and Citibank – agreed to pay $8.5 billion to settle complaints that they improperly foreclosed on some homeowners.