Links in “Discriminatory Practices/Disparate Impact”

Two earlier cases were settled before the U.S. Supreme Court could rule on disparate impact, the controversial finding that lending practices that are on their face neutral could still be considered discriminatory if they have an adverse impact on members of a protected class. However, a third case from Texas appears to be headed toward the Supreme Court and could be addressed as soon as September. [7/29/14]

New Hampshire landlords have settled in a case of discrimination against a domestic violence victim. [7/23/14]

Hanna & Associates, a Georgia-based debt collection agency, is facing penalties administered by the CFPB for deceptive debt collection practices. These practices included churning out over 350,000 lawsuits in a four-year period based on unsubstantiated or limited evidence that, although the result of an automated process, were signed by attorneys to increase the intimidation factor. [7/15/14]

Emboldened by recent court decisions, more cities and counties are filing "predatory lending" cases under the Fair Housing Act using the claim of disparate impact. Claims involve traditional redlining (excluding minority areas) or reverse redlining (targeting minority areas for high-cost loans). [7/14/14]

Citigroup—the third biggest bank by assets—is said to be approaching a $7 billion dollar settlement for allegedly deceiving investors about the quality of mortgage bonds before 2008's financial crisis. [7/9/14]

Following last week's announcement of a settlement with a credit union for denying a mortgage because one of the applicants was on maternity leave, the U.S. Department of Housing and Urban Development settles another claim with a California-based mortgage lender for denying or delaying mortgage loans to women because they were on maternity leave. Time to take another look at what your loan policy says about maternity leave? [7/2/14]

Based on recent compliance news, regulatory scrutiny regarding discrimination is on the rise, resulting in enforcement action after enforcement action. The CFPB, HUD, and other agencies are taking no prisoners, and while the fines are not always huge, they are seeking to make some examples. For the sake of your institution’s reputation and checkbook, we've put together a list of recent examples of discrimination-related enforcement actions and some possible takeaways they can provide. [7/1/14]

Department settles with group stemming from allegations they advertised a condominium complex as a place where children were not allowed to live, a violation of the Fair Housing Act. Worth noting that the action was the result of a referral from another group that receives funding from HUD to serve as watchdogs for discrimination. [6/30/14]

Mountain America Credit Union has agreed to pay $25,000 to settle a claim brought by HUD for allegations that the credit union had violated the Fair Housing Act. The claim began with a complaint by a married couple who claimed that their mortgage application had been denied because the wife was out on maternity leave. The credit union stated that its investigation showed that the credit union had never had engaged in any discriminatory practice, but both the credit union and HUD decided it was best to enter into a conciliation agreement. [6/27/14]

The CFPB has ordered GE Capital Retail Bank to pay the “largest credit card discrimination settlement in history,” $225 million, to compensate consumers for discriminatory and illegal credit card practices. The bureau found that GE Capital used deceptive marketing practices to promote add-on products, including deceiving customers as to their eligibility for benefits and not disclosing that customers were making a purchase. [6/27/14]