September 18, 2014 — Lending discrimination during pregnancy or maternity leave is "producing a steady flow of complaints" to the Department of Housing and Urban Development, according to a HUD official, the Washington Post's "Federal Eye" reports.
Bryan Greene, HUD's general deputy assistant secretary for fair housing and equal opportunity, said HUD has launched 173 investigations since 2010 into lending discrimination against mortgage applicants taking maternity leave, including 15 investigations this year.
A number of those investigations have ended with the lender reaching settlements with the Department of Justice and HUD. For example, in a recent case, FirstBank Mortgage Partner agreed to pay $35,000 to settle claims that it violated the Fair Housing Act by denying a mortgage to a couple because the woman was on maternity leave, even though she expected to return to work.
DOJ and HUD have also settled cases and levied fines against several other lenders, including Bank of America, Cornerstone Mortgage, MGIC and PNC Mortgage, all of which denied any wrongdoing in their settlement agreements. The banks have argued that they could deny loans because they expect a loss of income when women are on maternity leave and because women might not return to work.
Lenders Have 'Antiquated' View of Families
MomsRising Executive Director Kristin Rowe-Finkbeiner called the banks' assumptions "antiquated, ridiculous and just not true." She noted that about 50% of women today return to paid work within three months of childbirth, more than 70% of mothers who have young children are in the workforce, and 40% of mothers are the primary breadwinner or the only breadwinner for their families.
Greene said, "[I]n many instances, we find lenders just stop dead at the word 'pregnancy' or 'maternity leave.'" He added that lenders often fail to inquire about whether women plan to go back to work and instead "go on the assumptions that women won't return to work."
MomsRising is working with HUD on the issue and collecting discrimination reports from its members to share with the department (Wax-Thibodeaux, "Federal Eye," Washington Post, 9/16).