Fifth Third to pay $1.52M in discrimination case
08/11/2014 1:02 PM
08/11/2014 1:03 PM
Fifth Third Bancorp’s mortgage unit has agreed to pay $1.52 million in a settlement with the U.S. Department of Justice to resolve allegations the Cincinnati-based lender discriminated against home-loan applicants with disabilities.
The deal stems from claims Fifth Third Mortgage Co. discriminated against applicants by asking them for letters from doctors to document income from Social Security disability insurance.
The settlement resolves allegations that Fifth Third violated the Fair Housing Act and the Equal Credit Opportunity Act, the Justice Department said.
The Justice Department said it launched its investigation after a complaint that loan applicants filed with the U.S. Department of Housing and Urban Development.
A second defendant in the case, Michigan-based Cranbrook Mortgage Corp., will pay $2,000 to compensate the applicants who filed the complaint, the Justice Department said.
Cranbrook was a mortgage broker for Fifth Third and was authorized to originate loans on the lender’s behalf, according to court documents. Cranbrook has not been accused of discrimination against other loan applicants, the Justice Department said.
The settlement, announced last week, calls for Fifth Third to pay $1.52 million to compensate victims.
Fifth Third has also agreed to conduct training of its underwriters and loan officers and monitor loan applications to ensure applicants with disabilities are not asked for letters from doctors, the Justice Department said.
In a statement, Fifth Third said it is “pleased to have resolved this matter and put it behind us. Fifth Third Bank remains committed to making mortgages available on a fair and equitable basis.”
Meanwhile, in an unrelated discrimination case, the Justice Department is investigating Fifth Third to determine whether it discriminated in auto lending. Fifth Third disclosed that investigation in May.
Fifth Third Bank is the fourth-largest bank by market share in the Charlotte metropolitan area.
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