Payoff

A Loan Payoff

The U.S. Department of Housing and Urban Development ordered Citizens Bank of Pennsylvania to pay $115,000 to settle allegations that it violated the Fair Housing Act.

Citizens had the audacity to tell a Philadelphia woman on maternity leave — supposedly receiving “full pay” — that she would have to return to work before her application for a home equity line of credit could be approved.
 

The woman alleged “Citizens Bank knew that she was on maternity leave and discriminatorily denied her loan application due to her sex and familial status,” stated the complaint.

Citizens responded that the “full pay,” according to the woman's pay stubs, was in the form of short-term disability. The income was not considered stable and it was not likely to continue, the bank countered; that money could not be considered for loan purposes.

The “decision to decline the application was based only on the fact that the amount of income was insufficient,” Citizens said.
 

Citizens decided to settle instead of fighting HUD's charges.
 

For its temerity to attempt to make a loan which it could recoup, Citizens agreed to pay the woman $40,000; to pay $75,000 to a HUD-approved fair housing or advocacy organization (i.e. a “progressive” political action group); to provide fair housing training to its staff; and to adopt a policy “making it clear that all loan products are to be made available, regardless of an applicant's parental status” (and, it would seem, without regard to the ability to repay).
 

So the bank is not allowed to make a prudent decision on its loan and has to pay off a political action group. That sounds reasonable.

(from a Trib article)