IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA

UNITED STATES OF AMERICA,

)

)

)

Plaintiff,

)

v.

)

)

BANK OF AMERICA N.A.

)

D/B/A BANK OF AMERICA

)

HOME LOANS,

)

)

Defendant.

)

____________________________________)

CIVIL ACTION NO. 3:12-CV-605

COMPLAINT

The United States of America alleges:

1. This action is brought pursuant to Section 812(o) of the Fair Housing Act, Title VIII of

the Civil Rights Act of 1968, as amended, 42 U.S.C. § 3612(o) (“FHA”) by the United

States on behalf of Steven Danczak and Karen Danczak, Renee Mill, David Van Wagnen,

and the Assistant Secretary for Fair Housing and Equal Opportunity of the Department of

Housing and Urban Development (“Assistant Secretary”). This action is also brought by

the United States to enforce the provisions of the FHA, 42 U.S.C. §§ 3601-3619, and the

Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f (“ECOA”).

Jurisdiction and Venue

2. This Court has jurisdiction over this action under 28 U.S.C. § 1345, 42 U.S.C. § 3612(o),

and 15 U.S. C. § 1691(h).

3. Venue is proper pursuant to 28 U.S.C. § 1391 because Defendant Bank of America N.A.

D/B/A Bank of America Home Loans (“Bank of America”) has its principal place of

business in Charlotte, in the Western District of North Carolina.

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Complainants and Defendant 4. Steven Danczak resides with his wife Karen Danczak in Eau Claire, Wisconsin. Mr.
Danczak recieves Social Security Disability Insurance (hereinafter “SSDI”) income and is handicapped as defined by the Fair Housing Act, 42 U.S.C. § 3602(h). 5. David Van Wagnen resides in Lapeer, Michigan. Mr. Van Wagnen receives SSDI income and is handicapped as defined by the Fair Housing Act, 42 U.S.C. § 3602(h). 6. Renee Mill resides in Oscoda, Michigan. Ms. Mill receives SSDI income and is handicapped as defined by the Fair Housing Act, 42 U.S.C. § 3602(h). 7. Defendant Bank of America is, and was during the time period relevant to the events at issue in this lawsuit, a bank holding company with its principal place of business in Charlotte, North Carolina. Bank of America offers the traditional services of a financial depository and lending institution, including the receipt of monetary deposits and the financing of residential housing and commercial loans.
Factual and Legal Background Steven and Karen Danczak
8. Steven and Karen Danczak applied for a 30-year, fixed-rate mortgage loan insured by the Veteran’s Administration (“VA”) through Countrywide Home Loans (hereinafter “Countrywide”) in or about April 2009. The loan was for the purchase of a dwelling located at 4712 Havenwood Lane, Eau Claire, Wisconsin, 54701.
9. The property located at 4712 Havenwood Lane, Eau Claire, Wisconsin, is a dwelling within the meaning of the Fair Housing Act, 42 U.S.C. § 3602(b).
10. On or about July 1, 2008, Bank of America acquired Countrywide. Bank of America processed the Danczak’s loan application.
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11. Mr. Danczak provided Bank of America with his Social Security award letter, his Veteran’s Administration benefits award letter, and other relevant documents that substantiated his SSDI income and other income. None of the documents indicate that the SSDI benefits have an expiration date.
12. SSDI is a monthly benefit for people who have worked in the past and paid Social Security taxes. SSDI benefits may be paid to people who are unable to work for a year or more because of their disability.1
13. Social Security benefits, including SSDI, are “public assistance benefits” for purposes of ECOA and its implementing regulation, Regulation B.
14. All recipients of SSDI have been determined to be disabled by the Social Security Administration.
15. On or around May 19, 2009, Bank of America requested that Mr. Danczak provide a letter from Mr. Danczak’s doctor saying he is permanently disabled.
16. Mr. Danczak did not provide a letter from a doctor and told the Bank that he believed the request was unlawful. Because Mr. Danczak did not provide the letter from his doctor, the Danczaks’ loan application was not approved, and the closing date passed on the house they intended to purchase on Havenwood Lane. The Danczaks lost the opportunity to purchase the home they desired.
17. On May 27, 2009, Mr. Danczak filed a timely complaint with the United States Department of Housing and Urban Development (hereinafter “HUD”), pursuant to Section 810(a) of the Fair Housing Act, as amended 42 U.S.C. § 3610(a). In the complaint, Mr. and Mrs. Danczak allege that Bank of America discriminated on the basis
1 The word “disability” is used interchangeably with “handicap,” as defined in 24 C.F.R. § 100.201. 3
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of Mr. Danczak’s handicap in violation of subsections 804(f)(2) and 805 of the Fair Housing Act.
David Van Wagnen 18. On or about August 10, 2009, David Van Wagnen applied to Bank of America for a 30-
year, fixed-rate conventional home mortgage loan, to purchase the dwelling located at 638 Saint Clair Street, Lapeer, Michigan 48446. 19. The property located at 638 Saint Clair Street, Lapeer, Michigan, is a dwelling within the meaning of the Fair Housing Act, 42 U.S.C. § 3602(b). 20. In applying for his mortgage, Mr. Van Wagnen provided Bank of America with a copy of his Social Security award letter, a Social Security Benefit Statement, a copy of “Entitlement Status” from the Social Security Administration (hereinafter “SSA”) which indicated the amounts of his monthly disability benefits, and other relevant documents that substantiated his SSDI income and other income. None of the documents indicate that the SSDI benefits have an expiration date. 21. On or about August 28, 2009, Bank of America requested that Mr. Van Wagnen provide a letter from his doctor stating that his SSDI benefits would continue for three years. 22. Mr. Van Wagnen contacted Bank of America on or about September 2, 2009, and questioned the need for the statement from his doctor. 23. A Bank of America employee stated that Mr. Van Wagnen’s loan could not close unless he provided a letter from his doctor stating that his SSDI benefits would continue for three years. 24. Mr. Van Wagnen withdrew his loan application because he did not wish to comply with Bank of America’s request.
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25. Mr. Van Wagnen reapplied for a mortgage loan via a mortgage broker and incurred additional costs associated with the new application and loan.
26. On February 2, 2010, David Van Wagnen filed a timely complaint with HUD, pursuant to Section 810(a) of the Fair Housing Act, as amended 42 U.S.C. § 3610(a). In his complaint, Mr. Van Wagnen alleges that Defendant Bank of America discriminated on the basis of his handicap in violation of subsections 804(f)(2) and 805 of the Fair Housing Act. Renee Mill
27. In or around December, 2009, Renee Mill applied to Bank of America for a 30-year, fixed-rate conventional home mortgage loan, to purchase the dwelling located at 4941 Aaron Drive, Oscoda, Michigan 48750. Ms. Mill made her application via Huron Shores Mortgage Company (“Huron Shores”), a mortgage broker.
28. The property located at 4941 Aaron Drive, Oscoda, Michigan, is a dwelling within the meaning of the Fair Housing Act, 42 U.S.C. § 3602(b).
29. Ms. Mill provided Huron Shores with Social Security Benefit Statements for 2007 and 2008, and other relevant documents that substantiated her SSDI income. None of the documents indicate that the SSDI benefits have an expiration date.
30. On January 4, 2010, and again on January 15, 2010, Bank of America issued a document called a “Conditions Addendum” that indicated that before the closing documents could be prepared Ms. Mill would have to provide a letter from her doctor stating what her condition is.
31. Ms. Mill offered to provide Bank of America with statements from three individuals who would confirm her disability without specifying the nature or extent of her disability.
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32. Bank of America made a statement to Huron Shores that it would not approve the loan without a letter from a doctor.
33. Ms. Mill provided letters from two doctors that detailed the nature of her disability. On or about January 29, 2010, Respondent Bank of America approved Mill’s home mortgage loan.
34. On August 10, 2010, Renee Mill filed a timely complaint with HUD, pursuant to Section 810(a) of the Fair Housing Act, as amended 42 U.S.C. § 3610(a). In her complaint, Ms. Mill alleges that Bank of America discriminated on the basis of her handicap in violation of subsection 805 of the Fair Housing Act. Secretary-Initiated Complaint
35. On July 2, 2010, the Assistant Secretary filed a complaint with HUD, pursuant to Section 810(a) of the Fair Housing Act, as amended 42 U.S.C. § 3610(a). The complaint alleges that Bank of America discriminated because of disability in processing home mortgage applications in violation of section 805 of the Fair Housing Act.
36. Pursuant to the requirements of 42 U.S.C. §§ 3610(a) and (b) the Secretary of HUD conducted and completed an investigation of the above complaints, attempted conciliation without success, and prepared a final investigative report. Based on information gathered in the investigation, the Secretary, pursuant to 42 U.S.C. § 3610(g)(1), determined that reasonable cause exists to believe that discriminatory housing practices have occurred. Therefore, on January 23, 2012, the Secretary issued a Charge of Discrimination pursuant to 42 U.S.C. § 3610(g)(2)(A), charging Bank of America with engaging in discriminatory housing practices in violation of the Fair Housing Act.
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37. On February 13, 2012, the Assistant Secretary elected to have the charge resolved in a federal civil action pursuant to 42 U.S.C. § 3612(a).
38. The Secretary of HUD has authorized the Attorney General to commence a civil action pursuant to 42 U.S.C. § 3612(o). Bank of America’s Discriminatory Policies
39. From at least May 1, 2007 until approximately November 30, 2011, Bank of America had a written policy regarding the documentation of disability income that required disabled applicants present an “award letter indicating the payment amount and conditions for termination of payment which must continue for three years,” or documentation from an insurance carrier or employer.
40. From at least May 1, 2007, until approximately November 30, 2011, it was the policy and practice of Bank of America to require disabled loan applicants who applied for mortgage loans using SSDI income to provide a letter from a doctor to establish that their receipt of SSDI income would continue for at least three years.
41. In some cases, Bank of America required disabled loan applicants to provide information about the nature and severity of their disability as a condition of receiving a mortgage.
42. From at least May 1, 2007, until approximately November 30, 2011, Bank of America did not require loan applicants who were not disabled to provide any proof that their income would continue for at least three years.
43. From at least May 1, 2007, until approximately November 30, 2011, Defendant Bank of America did not properly train its underwriters, loan officers, and other employees regarding appropriate documentation for SSDI income.
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44. Defendant Bank of America is subject to the federal laws governing fair lending, including the Fair Housing Act and the Equal Credit Opportunity Act and their respective implementing regulations, the fair housing regulations of the Department of Housing and Urban Development, 24 C.F.R. § 100.1, et seq., and Regulation B of the Board of Governors of the Federal Reserve, 12 C.F.R. § 202.1, et seq. The Fair Housing Act prohibits financial institutions from, inter alia, discriminating on the basis of handicap in their home-mortgage lending practices. The Equal Credit Opportunity Act prohibits financial institutions from, inter alia, discriminating on the basis of receipt of public assistance in their home-mortgage lending practices.
45. Among the written guidelines and regulations applicable to SSDI income published by the entities that insure or purchase the mortgage loans at issue in this case, there is no written guideline or regulation that requires a lender to obtain a letter from a doctor.
46. As described herein Bank of America’s policies and practices of requiring mortgage applicants who received SSDI income to provide a letter from a doctor constitute discrimination on the bases of handicap and receipt of public assistance. Bank of America’s policies and practices were intended to deny and discourage, or have the effect of denying or discouraging, an equal opportunity to persons who are disabled and receiving SSDI income, to obtain lending services. These policies and practices are not justified by business necessity or legitimate business considerations because Bank of America could have properly documented SSDI income without a letter from a doctor. COUNT I (Discrimination on the Basis of Disability)
47. Bank of America’s actions as alleged herein constitute:
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a. Making, printing, or publishing any notice or statement with respect to the sale of a dwelling that indicates a preference, limitation, or discrimination on the basis of disability, in violation of the Fair Housing Act, 42 U.S.C. § 3604(c); b. Discrimination in the sale, or otherwise making unavailable or denying, dwellings to buyers because of handicap, in violation of the Fair Housing Act, 42 U.S.C. § 3604(f)(1); c. Discrimination in the terms, conditions, or privileges of the sale of a dwelling, or in the provision of services in connection with such a dwelling, because of handicap in violation of the Fair Housing Act, 42 U.S.C. § 3604 (f)(2); “and” d. Discrimination in making available a loan for the purchase of a dwelling, or in the terms or conditions of such a loan, based on handicap in violation of the Fair Housing Act, 42 U.S.C. § 3605;
COUNT II (Discrimination on the Basis of Receipt of Public Assistance) 48. Bank of America’s actions as alleged herein constitute: a. Discrimination against applicants with respect to credit transactions, on the basis of receipt of public assistance, in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691(a)(2); and b. Discrimination against applicants with respect to credit transactions by taking receipt of public assistance into account in evaluating creditworthiness, in violation of the Equal Credit Opportunity Act, Regulation B, 12 C.F.R. 202.4, 202.5, and 202.6.
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COUNT III (Pattern or Practice of Discrimination) 49. Bank of America’s actions as alleged herein constitute: a. A pattern or practice of resistance to the full enjoyment of rights secured by the Fair Housing Act, in violation of 42 U.S.C. § 3614(a) and/or the Equal Credit Opportunity Act, 15 U.S.C. § 1691e(h); and/or b. A denial of rights granted by the Fair Housing Act to a group of persons that raises an issue of general public importance, in violation of 42 U.S.C. § 3614(a). 50. Persons who have been victims of Bank of America’s discriminatory policies and practices are aggrieved persons as defined in 42 U.S.C. § 3602(i) and as described in 15 U.S.C. § 1691(e)(i), and have suffered damages as a result of defendant’s conduct in violation of both the Fair Housing and the Equal Credit Opportunity Acts, as described herein.
WHEREFORE, the United States prays that the Court enter an order that: 1. Declares that the discriminatory housing practices of Defendant, as set forth above,
violate subsections 804(c), 804(f)(1)-(2), and 805 of the Fair Housing Act, 42 U.S.C. § 3604(c), (f)(1)-(f)(2); 42 U.S.C. § 3605; 2. Declares that the discriminatory lending practices of Defendant, as set forth above, violate The Equal Credit Opportunity Act, 15 U.S.C. § 1691(a)(2), and Regulation B, 12 C.F.R. 202.4, 202.5, and 202.6; 3. Enjoins Defendant, its agents, employees, and successors, and all other persons in active
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concert or participation with any of them, from: a. discriminating because of disability against any person in any aspect of home mortgage lending; b. discriminating because of receipt of public assistance against any person in any aspect of home mortgage lending; c. failing or refusing to take such affimrative steps as may be necessary to restore, as nearly as practicable, Steven and Karen Danczak, David Van Wagnen, Renee Mills, and any other aggrieved persons, to the position in which they would have been but for Defendant’s unlawful conduct; and d. failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence of any conduct that violates the Fair Housing Act or the Equal Credit Opportunity Act in the future and to eliminate, to the extent practicable, the effects of Defendant’s unlawful conduct; and
4. Awards such monetary damages as would fully compensate Steven and Karen Danczak, David Van Wagnen, Renee Mills, and any other aggrieved persons for injuries caused by Defendant’s discriminatory conduct;
5. Awards civil penalties against the Defendant for each of its violations of the Fair Housing Act, pursuant to 42 U.S.C. § 3612(g)(3) and 24 C.F.R. § 180.671; and
6. Awards any additional relief as may be appropriate pursuant to 42 U.S.C. § 3612(g)(3).
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The United States filrther prays for stich additional relief as the interests ofjustice may reqttire.

~ Dated:

2012

sf Anne M. Tompkins ANNE M. TOMPKINS United States Attorney Westem District ofNorth Carolina
sf Paul B. Taylor PAULB. TAYLOR Assistant United States Attomey Civil Chief Western District ofNorth Carolina Bar No. NC 10067 227 W. Trade St. Suite 1650 Charlotte, NC 28202 paul.taylor@usdoj.gov Phone; (704) 344-6222 Fax: (828) 271-4327

ERIC H. HOLDER, JR.
Attorney General
CL. £: ~,-:
THOMAS E. PEREZ Y
Assistant Attomey General
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STEVEN H. ROSENBAUM
Chief

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Trial Attomey

.

Housing and Civil Enforcement

Section Civil Rights Division U.S. Department of Justice
950 Pelmsylvania Avenue NW - G st.
Northwest Building, 7th Floor

Washington, DC 20530

lucy.carlson@usdoj.gov

Phone: (202) 305-0017

Fax: (202) 514-1116

-

-

- - -- - -- - -

12
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 </s> IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA

UNITED STATES OF AMERICA,

)

)

)

Plaintiff,

)

v.

)

)

BANK OF AMERICA, N.A.

)

D/B/A BANK OF AMERICA

)

HOME LOANS

)

)


Defendant.

)

____________________________________)

CIVIL ACTION NO. 3:12-CV-605

 


CONSENT ORDER I. INTRODUCTION The Consent Order resolves the claims of the United States that the Defendant, Bank of America N.A. D/B/A Bank of America Home Loans (“Bank of America” or “Bank”), in processing and underwriting mortgage loans, has engaged in a pattern or practice of violating the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601-3619, by discriminating on the basis of disability, and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691-1691f, by discriminating on the basis of receipt of public assistance. The Consent Order also resolves the claims of the United States brought pursuant to 42 U.S.C. § 3612(o) on behalf of Steven Danczak, Karen Danczak, Renee Mill, and David Van Wagnen. There has been no factual finding or adjudication with respect to any matter alleged by the United States. The parties have entered into the Consent Order to avoid the risks, expenses, and burdens of litigation and to resolve voluntarily the claims in the Complaint of the Defendant’s alleged violations of federal fair housing and fair lending laws.

Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 1 of 24

II. BACKGROUND Bank of America is headquartered in Charlotte, North Carolina. As of December 31, 2011, it operated in all 50 states, the District of Columbia and more than 40 countries. The Bank provides a diversified range of banking and non-banking financial services and products. In 2011, the Bank originated approximately $152 billion worth of first mortgages. The United States alleges that the Bank discriminated against some mortgage applicants with a disability by requiring, as a condition of originating a mortgage loan, that the applicant provide a letter from a doctor to document his or her Social Security Disability Insurance (“SSDI”) income. Some applicants were asked for a letter from a doctor providing information about the nature and severity of the applicant's disability; other applicants were asked for a letter from a doctor indicating the duration of their disability. Among the written guidelines and regulations applicable to SSDI income published by the entities that insure or purchase the mortgage loans at issue in this case, there is no written guideline or regulation that requires a lender to obtain a letter from a doctor. Steven and Karen Danczak, Renee Mill, David Van Wagnen (the “HUD Complainants”), and the Assistant Secretary of HUD for Fair Housing and Equal Opportunity filed complaints with the Department of Housing and Urban Development (“HUD”) as set out in the Complaint. Bank of America has agreed to pay money damages to the HUD Complainants and other mortgage applicants the United States has identified and will identify as aggrieved by similar alleged discriminatory conduct by the Bank between May 1, 2007, and April 30, 2012. The Bank also agrees to maintain the revised policies that it put in place in November 2011, prior to any determination by HUD regarding this matter, and provide training to its employees to ensure that disabled mortgage applicants are treated in a manner that
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does not discriminate on the basis of disability or receipt of public assistance, consistent with the requirements of the FHA and the ECOA.
III. POSITION OF BANK OF AMERICA Bank of America denies the matters alleged in this lawsuit, and states that it has treated loan applicants fairly and without regard to impermissible factors, such as handicap or disability. Bank of America enters into this settlement solely for the purpose of avoiding costly litigation with the Department of Justice, and to permit it to dedicate more of its resources to providing financial services to its many thousands of customers and to serving its communities, employees and shareholders. Bank of America contends that it sought to facilitate the ability of persons whose mortgage applications relied upon disability income to purchase homes. Thus, in certain cases, Bank of America requested a letter from a doctor regarding the expected duration of the disability of a mortgage loan applicant because of regulatory or investor requirements regarding the documentation of an applicant’s income or anticipated income. Bank of America asserts that it did not unlawfully discriminate against any person based on disability or otherwise. Bank of America is, and always has been, thoroughly committed to fair lending, non-discriminatory business practices and the promotion of equality across customer and borrower groups. The United States acknowledges the substantial cooperation of Bank of America regarding the matters addressed in this Consent Order.
IV. REMEDIAL ORDER 1. The Effective Date shall be the date on which the Consent Order is approved and entered by the Court.
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2. The Bank, including all of its officers, employees, agents, assignees, successors in interest, and all those in active concert or participation with any of them, shall comply with all provisions of this Consent Order, and shall not discriminate against any mortgage loan applicant who relies on disability income by asking the applicant to provide a letter from a doctor to verify the continued eligibility to receive such income. This prohibition includes, but is not limited to, the adoption, performance, or implementation of any policy, practice, or act that requires an applicant who relies on disability income to produce a letter from a doctor.
A. Policies and Procedures 3. In November 2011, Bank of America published new policies regarding proper documentation of SSDI and other disability income when underwriting mortgage loans under the headings “Employment and Income – Conventional” and “Documentation Types and Requirements.” Bank of America shall maintain the policies concerning verification or documentation of SSDI and other disability income (collectively, the “Disability Income Policies”) during the term of this Consent Order. During the term of this Consent Order, any proposed changes to the Disability Income Policies shall be submitted to the United States for approval. The United States shall make a determination regarding proposed changes within 30 days of receipt, or the proposed changes will be presumed to have been approved. 4. In keeping with the Disability Income Policies, Bank of America shall not request that an applicant for a mortgage loan provide a letter from a doctor to document or substantiate disability income or to establish the duration of disability income. 5. Bank of America shall take steps to destroy any and all medical information contained in its records regarding the HUD Complainants.
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B. Monitoring Program 6. Within sixty (60) days of the Effective Date, Bank of America shall implement a monitoring program designed to ensure compliance with the Disability Income Policies and the Consent Order. The program shall be designed to monitor loan processing and underwriting activities for compliance with the Disability Income Policies, to detect any discrimination toward applicants that are disabled and rely on SSDI income in mortgage applications received after December 1, 2011. In addition to the reporting requirements of Paragraph 37, the Bank shall inform the United States of the results of the monitoring program within sixty (60) days of the end of each six (6) month period. 7. Bank of America shall provide a description of the monitoring program required under Paragraph 6 to the United States within 30 days of the Effective Date of the Consent Order.1 The United States shall have 30 days from receipt of the description to raise any objections to the monitoring program and the parties shall meet and confer to resolve any differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. 8. If the results of the monitoring program identify loan applicants who were asked for a letter from a doctor concerning or relating to the verification of disability income, Bank of America shall take prompt corrective action, including compensation for identified applicant(s) consistent with Paragraphs 24 through 26 of the Consent Order, as well as additional training for employees who worked on the identified application(s).
1 All material required by the Order to be sent to counsel for the United States shall be sent by commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil Rights Division, U.S. Department of Justice, 1800 G Street NW, Suite 7002, Washington, DC 20006, Attn: DJ 188-55-9. The parties may also agree to delivery electronically.
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9. A report on the results of the monitoring program required by Paragraph 6 shall be presented to the appropriate management committee (the “Committee”) for review. The results of the monitoring program required by Paragraph 6, and the reports reviewed by the Committee shall be provided to the United States as part of the reports required by Paragraph 37.
C. Communication of the Disability Income Policies and Fair Lending Training Program
10. Within 120 days of the Effective Date of the Consent Order, Bank of America shall: (a) inform residential mortgage loan originators, processors, and underwriters (“Applicable Employees”) of the terms of this Consent Order (including providing access to the Consent Order through an Internet link) and (b) remind Applicable Employees of the Bank’s Disability Income Policies. As part of this effort, Bank of America shall require that each Applicable Employee electronically acknowledge that he or she: (a) had access to the Consent Order and (b) understands the Bank’s Disability Income Policies, and shall further provide a means for each Applicable Employee to submit questions concerning the Bank’s Disability Income Policies. Such acknowledgements shall be substantially in the form of Appendix A (Employee Acknowledgment), and Bank of America shall retain records of these acknowledgements and make them available to the United States upon request.
11. Within 120 Days of the Effective Date of the Consent Order, Bank of America shall update its existing fair lending training program for Applicable Employees to include information on the Consent Order and the Disability Income Policies, and shall communicate such update during the next scheduled fair lending training session(s). The content of this update shall be approved by the United States and shall remain in effect for the duration of the Consent Order. Bank of America shall retain records concerning each Applicable Employee’s
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participation in the fair lending training, and shall make such records available to the United States upon request.
D. Complaint Resolution Program 12. During the duration of the Consent Order, Bank of America shall maintain a complaint resolution program to address complaints alleging discrimination on the basis of disability and/or receipt of public assistance with regard to requests for a doctor’s letter concerning verification of disability income (“Complaints”). Documentation regarding Complaints, if any, shall be included in the semi-annual reports referenced in Paragraph 37. There is no requirement under the Consent Order that any Complaint necessarily be resolved for or against Bank of America. E. Compensation for Aggrieved Persons 13. Within thirty (30) days of entry of this Consent Order, Bank of America shall enter into a contract retaining a Settlement Administrator (“Administrator”), subject to approval by the United States, to conduct the activities set forth in Paragraphs 14 through 34. Bank of America shall bear all costs and expenses of the Administrator, and Bank of America shall provide to the Administrator all funds required to compensate the HUD complainants and others under the Consent Order. Bank of America’s contract with the Administrator shall require the Administrator to comply with the provisions of this Consent Order as applicable to the Administrator.2 The Administrator’s contract shall require the Administrator to work
2 In the event the United States has reason to believe that the Administrator is not materially complying with the terms of its contract with Bank of America, the United States and Bank of America shall meet and confer for the purpose of mutually agreeing upon a course of action to effect the Administrator’s material compliance with its contract with Bank of America. In the event that the United States and Bank of America are unable to agree upon a course of action to effect the Administrator’s material compliance with its contract with the Bank of America, the parties shall present the matter to the Court.
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cooperatively with the United States in the conduct of its activities, including reporting regularly to and providing all reasonably requested information to the United States. Bank of America shall allow the Administrator access to all mortgage application loan files, and other records and documents that are in the possession of Bank of America or any entity owned by or affiliated with Bank of America, for the purposes of accomplishing the Administrator’s tasks set forth in the Consent Order. The Administrator’s contract shall require the Administrator to comply with all confidentiality and privacy restrictions applicable to the party who supplied the information and data to the Administrator. The Administrator’s contract shall require the Administrator to make its best efforts, using all reasonable methods, to review all relevant loan application records to identify aggrieved persons, locate each identified aggrieved person, and obtain such information as the United States reasonably considers necessary from each. The Administrator’s contract shall require the Administrator, as part of its operation, to establish cost-free means for aggrieved persons to contact it, including an email address, a toll-free telephone number, and means for persons with disabilities to communicate effectively, including TTY. Phase I of Identification of Aggrieved Persons
14. Within sixty (60) days of the Effective Date, Bank of America shall identify all loan applications made during the period May 1, 2009, through April 30, 2012, that listed SSDI income (“Relevant Applications”) and shall make available to the Administrator all records relating to the Relevant Applications. The borrower and co-borrower named in the Relevant Applications shall be referred to as “Relevant Applicants.”
15. In consultation with the United States, the Administrator shall design a method for review of the records related to the Relevant Applications, which shall include a combination of electronic searching and manual file review. “Manual file review” shall include a review of
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each page of the loan file and relevant records by an employee of the Administrator who clearly understands the requirements of this Consent Order and is competent to identify relevant documents and make determinations in accordance with Paragraphs 24 through 26. The Administrator shall convert all records related to the Relevant Applications to a searchable format. The Administrator shall conduct electronic searches to identify Relevant Applicants who may be eligible to be compensated under this Consent Order. The Administrator shall conduct manual file reviews of the records related to the Relevant Applications identified by electronic searches.
16. Based upon the manual file review, the Administrator shall make preliminary determinations regarding whether each Relevant Applicant is an Aggrieved Person and therefore eligible for an award as set out in Paragraphs 24 through 26. Bank of America agrees to accept these determinations without objection. The Administrator shall make preliminary determinations for Relevant Applications identified by electronic searches within a period of four months from the Effective Date, subject to an extension of time as provided by Paragraph 39. Phase II of Identification of Aggrieved Persons 17. The Administrator shall send a letter and form of affirmation substantially similar to Appendix C to all remaining Relevant Applicants who have not been identified by the United States as Aggrieved Persons. 18. For each response the Administrator receives to the letter required by Paragraph 18, the Administrator shall manually review the loan file and any contemporaneous records provided by the responding Relevant Applicant, and make a preliminary determination regarding whether the responding Relevant Applicant is an Aggrieved Person and therefore eligible for an award as set out in Paragraphs 24 through 26. The Administrator shall make its preliminary determinations in
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consultation with the United States. Bank of America agrees to accept these determinations without objection. 
 Review of Records for Loan Applicants Who Contact the Administrator
 19. If any person contacts the Administrator or is referred to the Administrator by the United States, claiming that Bank of America discriminated on the basis of disability relating to a mortgage application by requiring that the mortgage applicant provide a letter from a doctor as a condition of originating a mortgage loan, the Administrator shall request from Bank of America all relevant records for that person. The Administrator shall manually review the loan file, and any contemporaneous records provided by the claimant, and make a preliminary determination regarding whether the person is an Aggrieved Person and therefore eligible for an award as set out in Paragraphs 24 through 26. The Administrator shall make its preliminary determinations in consultation with the United States. Bank of America agrees to accept these determinations without objection. The deadline for a person to contact the United States or the Administrator under this Paragraph shall be 180 days after the Effective Date; however the deadline shall be extended to be consistent with any extension of the four-month period in Paragraph 16. Final Determinations by the United States
20. Every ninety (90) days, the Administrator shall provide reports to the United States and Bank of America, including the Administrator’s preliminary determinations regarding whether each Relevant Applicant is eligible for an award, and relevant loan documents.
21. The United States shall review all preliminary determinations of the Administrator and shall make final determinations regarding which Relevant Applicants are Aggrieved Persons and the amount of compensation to be paid to each Aggrieved Person under
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the terms of this Consent Order. Bank of America shall not review these determinations or have the right to object to any determination.
22. The Administrator shall send a letter and release substantially similar to Appendices B and D to persons who are determined by the United States to be Aggrieved Persons eligible for compensation.
23. If an Aggrieved Person does not respond to a letter from the Administrator within 60 days, the Administrator shall take reasonable steps to confirm the current address of the Aggrieved Person and shall send a second letter to the current address via Federal Express. Compensation Amounts for Aggrieved Persons
24. The Administrator shall pay $2,500 in monetary damages to each loan applicant whom the United States identifies as an Aggrieved Person meeting all of the following criteria:
 Applicant applied to Bank of America for a mortgage loan between May 1, 2007, and April 30, 2012; and
 There is information in the loan file or other contemporaneous records relating to the loan application that the applicant was asked to provide a letter from a doctor regarding the nature or severity of the applicant’s disability.
25. The Administrator shall pay $1,000 in monetary damages to each loan applicant whom the United States identifies as an Aggrieved Person meeting all of the following criteria:
 Applicant applied to Bank of America for a mortgage loan, other than a loan insured by the Federal Housing Administration, between May 1, 2007, and April 30, 2012; and
 There is information in the loan file or other contemporaneous records relating to the loan application indicating that the applicant was asked to provide a letter
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from his or her doctor regarding his or her disability, or there is a letter from the applicant’s doctor regarding the applicant’s disability in the loan file. 26. The Administrator shall pay $5,000 in monetary damages to each loan applicant whom the United States identifies as an Aggrieved Person meeting all of the following criteria:  The applicant qualifies as an Aggrieved Person under either Paragraph 24 or Paragraph 25 above; and  The loan file or other contemporaneous documents indicate that the applicant was unwilling to provide a letter from a doctor or objected to providing a letter from a doctor, or  The loan file or other contemporaneous documents indicate specific economic harm caused by denial of the loan application or failure to originate the loan because the applicant did not provide a letter from a doctor. 27. The compensation amounts set out in Paragraphs 24 through 26 are mutually exclusive and are to be paid on a per loan or per application basis; if there is a borrower and coborrower or an applicant and co-applicant, they will share the compensation equally. Compensation Amounts for HUD Complainants 28. Within thirty (30) days of receipt of a properly executed release in the form or Appendix B, the Administrator shall pay HUD complainants Steven and Karen Danczak $50,000 total. 29. Within thirty (30) days of receipt of a properly executed release in the form of Appendix B, the Administrator shall pay HUD complainant Renee Mill $50,000. 30. Within thirty (30) days of receipt of a properly executed release in the form of Appendix B, the Administrator shall pay HUD complainant David Van Wagnen $25,000.
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Payment Procedures 31. On or before the fifth day of each calendar month, the Administrator shall send a
request for funding to Bank of America, providing (a) copies of the executed releases, if any, received in the previous calendar month from Aggrieved Persons, and listing (b) the compensation to be paid to each Aggrieved Person and (c) the total dollar amount required to compensate those Aggrieved Persons.
32. Bank of America shall transmit the requested funds to the Administrator within ten (10) days of receipt of a request for funding.
33. The Administrator shall transmit the proper funds to each Aggrieved Person within ten (10) days of receipt of funds from Bank of America.
34. No aggrieved person shall be paid any amount under this Consent Order until he or she has executed and delivered to the Administrator a written release as set forth in Appendix B.
35. Bank of America shall not be entitled a set-off, or any other reduction, of the amount of payments to an aggrieved person because of any debts owed to Bank of America by an aggrieved person. Bank of America also shall not refuse to make a payment based on a release of legal claims previously signed by any Aggrieved Person.
V. EVALUATING AND MONITORING COMPLIANCE 36. For the duration of the Consent Order, Bank of America shall retain all records relating to its obligations hereunder as well as its compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request, including files and electronic data for mortgage applications made during the duration of the Consent Order. 37. In addition to the submission of any other plans or reports specified in the Consent Order, Bank of America shall submit reports to the United States on its progress in
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completing the requirements of the Consent Order. Each such report shall provide a complete account of Bank of America’s actions to comply with each requirement of the Consent Order during the previous reporting period, an assessment of the extent to which each obligation was met, an explanation of why any particular obligation was not met for the previous reporting period, and any recommendations for additional actions to achieve the obligations of the Consent Order. Bank of America shall submit reports every six months in the first year after the Effective Date and shall submit annual reports on the anniversary of the Effective Date thereafter for the duration of the Consent Order. In addition, if applicable, Bank of America shall attach to the reports copies of training materials disseminated pursuant to the Consent Order.
VI. ADMINISTRATION 38. The Consent Order shall remain in effect for 42 months after the Effective Date. Notwithstanding the above, the Consent Order may be extended further upon motion of the United States to the Court, for good cause shown. 39. The details in administration set forth in Paragraphs 13 through 23 and Paragraphs 31 through 34 may be modified by written agreement of the parties and without further Court approval. Any time limits for performance fixed by the Consent Order may be extended by written agreement of the parties. Other modifications to the Consent Order may be made only upon approval of the Court, upon motion by either party. 40. The Consent Order shall be binding on Bank of America, including all its officers, employees, agents, representatives, assignees, and successors in interest, and all those in active concert or participation with any of them. In the event Bank of America seeks to transfer or assign all or part of its operations, and the successor or assign intends on carrying on the same or
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similar use, as a condition of sale, Bank of America shall obtain the written agreement of the successor or assign to any obligations remaining under the Consent Order for its remaining term.
41. Nothing in the Consent Order shall excuse Bank of America’s compliance with any currently or subsequently effective provision of law or order of a regulator with authority over Bank of America that imposes additional obligations on Bank of America.
42. The parties agree that, as of the date of entry of the Consent Order, litigation is not “reasonably foreseeable” concerning the matters described in the Consent Order. To the extent that any party previously implemented a litigation hold to preserve documents, electronically stored information, or things related to the matters described in the Consent Order, the party is no longer required to maintain such a litigation hold, with the exception of documents, electronically-stored information, or other things relating to loans originated by Bank of America between May 1, 2007, and April 30, 2012.
43. In the event that any disputes arise about the interpretation of or compliance with the terms of the Consent Order, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to this Court for resolution. If the United States believes that Bank of America has violated any provision of the Consent Order, it will provide the Bank written notice thereof and allow 30 days to resolve the alleged violation before presenting the matter to this Court. In the event of either a failure by the Bank to perform in a timely manner any act required by the Consent Order or an act by the Bank in violation of any provision hereof, the United States may move this Court to impose any remedy authorized by law or equity, including attorneys’ fees and costs.
44. Bank of America’s compliance with the terms of the Consent Order shall fully and finally resolve all FHA claims and all ECOA claims that are raised in the Complaint’s
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allegations of discrimination on the basis of disability and receipt of public assistance, including all claims for equitable relief and monetary damages and penalties arising from those claims, for mortgage applications made to Bank of America between May 1, 2007, and April 30, 2012. The Consent Order does not release any other legal claims, including claims that may be held or are currently under investigation by any federal agency. The Consent Order does not release claims for practices not addressed in the Complaint’s allegations, including claims that may be held or are currently under investigation by any federal agency, or any claims that maybe pursued for actions that may be taken by any executive agency established by 12 U.S.C. § 5491 or the appropriate Federal Banking Agency (“FBA”), as defined in 12 U.S.C. § 1813(q), against Bank of America, any of its affiliated entities, and/or any institution-affiliated party of Bank of America, as defined in 12 U.S.C. §1813(u), pursuant to 12 U.S.C. § 1818 or any statute or regulation. The Consent Order does not resolve and release any claims other than claims for discrimination.
45. The United States and Bank of America shall bear their own costs and attorneys’ fees associated with this litigation.
46. The Court shall retain jurisdiction for the duration of the Consent Order to enforce the terms of the Consent Order, after which time the case shall be dismissed with prejudice.
SO ORDERED, this ___ day of __________, 2012.
________________________________ UNITED STATES DISTRICT JUDGE
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The undersigned hereby apply for and consent to the entry of the Order:

For Plaintiff United States of America:

Dated: _S_e_p_te_m__b_e_r _1_3_, _2_0_1_2__

Respectfully submitted,

ANNE M. TOMPKINS United States Attorney Western District of North Carolina
_s/ Paul B. Taylor__________________ PAUL B. TAYLOR Assistant United States Attorney Civil Chief Western District of North Carolina Bar No. NC 10067 227 W. Trade St. Suite 1650 Charlotte, NC 28202 paul.taylor@usdoj.gov Phone: (704) 344-6222 Fax: (828) 271-4327

THOMAS E. PEREZ Assistant Attorney General Civil Rights Division
STEVEN H. ROSENBAUM Chief
JON SEWARD Deputy Chief
_s/ Lucy G. Carlson____________ LUCY G. CARLSON Trial Attorney Housing and Civil Enforcement Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue NW Northwest Building, 7th Floor Washington, DC 20530 lucy.carlson@usdoj.gov Phone: (202) 305-0017 Fax: (202) 514-1116

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Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 18 of 24

Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 19 of 24

APPENDIX A
 Employee Acknowledgment
I acknowledge that on ________________, I was provided information about and access to the Consent Order entered by the Court in United States v. Bank of America , N.A. (W.D.N.C.), as well as Bank of America’s Disability Income Policies. I have had my questions about these documents answered. I understand my legal responsibilities and shall comply with those responsibilities.
__________________________________ Signature __________________________________ Print Name __________________________________ Job Title __________________________________ Date
19 Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 20 of 24

APPENDIX B Release
In consideration for the parties’ agreement to the terms of the Consent Order entered in United States v. Bank of America, N.A. (W.D.N.C.), and the payment to me of $__________, pursuant to the Consent Order and effective upon that payment, I hereby release and forever discharge all claims, rights, remedies, and recoveries related to the facts of housing and credit discrimination on the basis of disability and receipt of public assistance in the litigation referenced above, and release and forever discharge all claims, rights, remedies, and recoveries arising from housing and credit discrimination on the basis of disability and receipt of public assistance alleged in that litigation in connection with my application(s) for a residential mortgage, known and unknown, up to and including the date of execution of this release. I understand that this releases those claims, rights, remedies and recoveries against Bank of America, N.A. and against any and all related entities, parents, predecessors, successors, subsidiaries, and affiliates, and against any and all of their past and present directors, officers, agents, managers, supervisors, shareholders, and employees and their heirs, executors, administrators, successors in interest, or assigns.
Executed this ___ day of _______, ____. __________________________________ Signature __________________________________ Print Name __________________________________ Address
20 Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 21 of 24

APPENDIX C [Letter to Relevant Applicants not identified as Aggrieved Persons] The United States settled certain claims regarding discrimination on the basis of disability against Bank of America. On [date] the United States District Court for the Western District of North Carolina entered an order regarding this settlement. Among other things, Bank of America has agreed to compensate persons whom the United States determines were discriminated against when they used Social Security Disability Insurance (“SSDI”) income on their mortgage applications. We are writing to you because Bank of America’s records indicate that you applied for a mortgage between May 1, 2009, and April 30, 2012, and that you LISTED SSDI income on your application. If you were asked to provide a letter from your doctor to support your mortgage application, you may be eligible to receive compensation of $1,000, $2,500, or $5,000, depending upon the circumstances. If you were asked to provide a letter from your doctor and you would like to participate in the settlement with Bank of America, please complete and sign the attached form and return it in the enclosed envelope. If you were not asked to provide a letter or you do not want to participate, you do not need to respond in any way. If you return this form, you are not guaranteed compensation. Your loan file will be reviewed to determine if you are qualified to receive compensation. If you wish to participate, you must return the attached form within thirty (30) days. If you have any questions about this matter, please feel free to contact [name and contact info for Administrator].
21 Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 22 of 24

AFFIRMATION THAT BANK OF AMERICA REQUESTED A LETTER FROM A DOCTOR
[name and address of applicants] [loan number of application] By my signature I hereby certify and affirm under penalty of perjury, that Bank of America or an employee of Bank of America requested that I provide a letter from a doctor as part of the mortgage application process.* Executed this ___ day of _______, ____.
__________________________________ Signature __________________________________ Print Name __________________________________ Address __________________________________ City, State, Zip Code __________________________________ Telephone Number
* Perjury is the criminal offense of making false statements under oath.
22 
 Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 23 of 24

APPENDIX D
[Letter to Aggrieved Persons]
The United States settled certain claims regarding discrimination on the basis of disability against Bank of America. Among other things, Bank of America has agreed to compensate persons whom the United States has determined were discriminated against when they used Social Security Disability Insurance (“SSDI”) income on their mortgage applications.
On [date] the United States District Court for the Western District of North Carolina entered an order regarding this settlement. Under the Court’s order, the United States has determined that Bank of America should pay you $____. To receive your payment, you must sign and return the enclosed Release. By signing the Release, you agree that you will not sue Bank of America for any claims you may have against them based on alleged discrimination on the basis of your SSDI income. If you decide to sign this Release, please write the date, print your name and sign your name where designated. You should return the signed Release in the enclosed pre-addressed postage pre-paid envelope.
After you sign and return the release, and the monetary payment is received from Bank of America and processed by [Administrator], the money that is to be paid to you will be sent to you by check.
Please be aware that the money you receive may be considered taxable income and thus may affect your federal, state, or local tax liability. This office cannot give you any advice on tax or other legal matters. We encourage you to consult with a qualified individual or organization about any possible tax or other consequences resulting from your receipt of this payment.
If you do not want to participate in this settlement, you may decline to do so. By declining to participate, you will give up your right to receive money through this settlement, but will not waive any other rights or claims that you believe you may have.
Please also be advised that government attorneys cannot act as your private attorney. Therefore, you may want to consult with a private attorney to discuss this matter and the options available to you or to have an attorney of your choice contact us.
If you have any questions about this matter, please feel free to contact [name and contact info for Administrator].
23 Case 3:12-cv-00605 Document 2-1 Filed 09/13/12 Page 24 of 24

 </s> U.S. District Court Western District of North Carolina (Charlotte) CIVIL DOCKET FOR CASE #: 3:12−cv−00605−RJC−DSC

CLOSED

United States of America v. Bank of America Assigned to: Chief Judge Robert J. Conrad, Jr Referred to: Magistrate Judge David S. Cayer Cause: 42:405 Fair Housing Act
Plaintiff
United States of America

Date Filed: 09/13/2012 Date Terminated: 07/18/2013 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Plaintiff
represented by Paul B. Taylor United States Attorney Office U. S. Courthouse, Room 233 100 Otis Street Asheville, NC 28801 828−271−4661 Fax: 828−271−4670 Email: paul.taylor@usdoj.gov ATTORNEY TO BE NOTICED

V. Defendant Bank of America

represented by John H. Culver , III KLGates LLP 214 North Tryon Street Hearst Tower, 47th Floor Charlotte, NC 28202 704−331−7400 Fax: 704−353−3153 Email: john.culver@klgates.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Phillip Lee Schulman , KLGates 1601 K Street, NW Washington, DC 20006 202−778−9027 Fax: 202−778−9100 Email: phil.schulman@klgates.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Date Filed 09/13/2012 09/13/2012
09/14/2012

# Docket Text
1 COMPLAINT against All Defendants, filed by United States of America.(Taylor, Paul) (Entered: 09/13/2012)
2 NOTICE by United States of America of Filing of Proposed Consent Order (Attachments: # 1 Proposed Order Consent Order)(Taylor, Paul) (Entered: 09/13/2012)
Case assigned to Chief Judge Robert J. Conrad, Jr and Magistrate Judge David Keesler. Notice: You must click this link to retrieve the Case Assignment Packet. This is your only notice − you will not receive a separate document.(eef) (Entered: 09/14/2012)

Case: 3:12-cv-00605-RJC-DSC As of: 06/03/2014 10:14 AM EDT 1 of 2

09/25/2012 09/25/2012 09/25/2012 09/28/2012 10/10/2012 10/10/2012 11/29/2012 12/06/2012 06/05/2013

3 MOTION for Leave to Appear Pro Hac Vice as to Phillip L. Schulman Filing fee $ 276, receipt number 0419−1797717. by Bank of America. (Culver, John). Motions referred to David Keesler. (Entered: 09/25/2012)
4 ORDER granting 3 Motion for Leave to Appear Pro Hac Vice added Phillip L. Schulman for Bank of America. Signed by Magistrate Judge David Keesler on 9/25/2012. (eef) (Entered: 09/25/2012)
Notice to Phillip L. Schulman: Pursuant to Local Rule 83.1 you are required to Register for ECF at www.ncwd.uscourts.gov. Deadline by 10/5/2012. (eef) (Entered: 09/25/2012)
5 Joint MOTION for Entry of Judgment /Proposed Consent Order by United States of America.Responses due by 10/15/2012 (Taylor, Paul) (Entered: 09/28/2012)
6 ORDER granting 5 Motion for Entry of Judgment. Signed by Chief Judge Robert J. Conrad, Jr on 10/10/12. (mga) (Entered: 10/10/2012)
7 CONSENT ORDER re: discrimination claims. Signed by Chief Judge Robert J. Conrad, Jr on 10/10/12. (mga) Modified docket text on 10/11/2012 (bsw). (Entered: 10/10/2012)
8 Joint MOTION to Amend/Correct 7 Order by United States of America.Responses due by 12/17/2012 (Taylor, Paul). Motions referred to David Keesler. (Entered: 11/29/2012)
9 Amended consent ORDER re 7 Consent Order. Signed by Chief Judge Robert J. Conrad, Jr on 12/5/2012. (blf) (Entered: 12/06/2012)
Case reassigned to Magistrate Judge David S. Cayer for case referral. Magistrate Judge David Keesler no longer referred case − conflict. This is your only notice − you will not receive a separate document.(bsw) (Entered: 06/05/2013)

Case: 3:12-cv-00605-RJC-DSC As of: 06/03/2014 10:14 AM EDT 2 of 2

 </s> Hom e » Briefing Room » Ju stice New s

Department of Justice

Office of Public A ffairs

FOR IMMEDIA TE RELEASE

Thursday , September 1 3, 201 2

Justice Department Reaches Settlement with Bank of America to Resolve Allegations of Discrimination Against Recipients of Disability Income
Settlement Provides Compensation to Victims Identified by the Department of Justice and Establishes Procedures for Treating
Borrowers Fairly Who Receive Disability Income
Bank of America N.A. has agreed to maintain rev ised policies, conduct employ ee training and pay compensation to v ictims to resolv e allegations that it engaged in a pattern or practice of discrimination on the basis of disability and receipt of public assistance in v iolation of the Fair Housing Act (FHA ) and the Equal Credit Opportunity Act (ECOA ).

The settlement, which is subject to court approv al, was filed today in federal court in Charlotte, N.C., where Bank of A merica is headquartered. The terms of the settlement require Bank of America to pay $1,000, $2,500 or $5,000 to eligible mortgage loan applicants who were asked to prov ide a letter from their doctor to document the income they receiv ed from Social Security Disability Insurance (SSDI). Applicants who were asked to prov ide more detailed medical information to document their income may be paid more than those who were asked to hav e a doctor v erify their source of income. Bank of A merica will hire a third party administrator to search approx imately 25 ,000 loan applications inv olv ing SSDI income to identify any other v ictims. Under the settlement, Bank of America will conduct training of its underwriters and loan officers and will monitor loan applications to ensure that applications from disabled indiv iduals are treated in a manner consistent with applicable law.
This lawsuit arose as a result of three complaints filed by loan applicants with the U.S. Department of Housing and Urban Dev elopment (HUD). A fter inv estigating the complaints, HUD undertook a broader inv estigation into Bank of America’s practices. Bank of A merica rev ised its policies for documenting disability income during HUD’s inv estigation. The Assistant Secretary of HUD elected to hav e the case heard in federal court and referred the case to the Department of Justice. The HUD complainants will receiv e a total of $1 25,000 to their harm and compensate them for costs associated with their loan applications.

“Loan applicants with disabilities should not be subjected to inv asiv e requests for medical information from a doctor when they are apply ing for credit,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civ il Rights Div ision. “Today ’s settlement shines a light on a practice that v iolates the Fair Housing Act and the Equal Credit Opportunity Act.”
The settlement comes after an inv estigation by the Justice Department. Bank of America cooperated fully with the department’s inv estigation into its lending practices and agreed to settle this matter without contested litigation. The lawsuit was dev eloped and filed by the Fair Lending Unit of the Housing and Civ il Enforcement Section in the Justice Department’s Civ il Rights Div ision. Since the Fair Lending Unit was established in February 201 0, it has filed or resolv ed 22 lending matters under the Fair Housing A ct, the Equal Credit Opportunity A ct, and the Serv icemembers Civ il Relief Act. The finalized settlements in these matters prov ide for a minimum of $37 0 million in monetary relief for more than 200,000 indiv idual borrowers.
“HUD and DOJ are committed to ensuring that lending institutions do not break the law. This settlement v indicates the rights of disabled homebuy ers who were singled out just because they rely on disability pay ments,” said John Trasv iña, HUD Assistant Secretary for Fair Housing and Equal Opportunity . “A pplicants who are otherwise qualified for a home loan should not hav e additional requirements placed on them because they hav e a disability .”
“This settlement confirms the resolv e of this office to protect the civ il rights of citizens in our district from illegal discriminatory practices,” said Anne M. Tompkins, U.S. Attorney of the Western District of North Carolina. “Discrimination in lending has profound consequences that

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Western District of North Carolina. “Discrimination in lending has profound consequences that will not be tolerated.”

Today ’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in Nov ember 2009 to wage an aggressiv e, coordinated and proactiv e effort to inv estigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney s’ offices and state and local partners, it’s the broadest coalition of law enforcement, inv estigatory and regulatory agencies ev er assembled to combat fraud. The task force has established financial fraud coordinators in ev ery U.S. attorney ’s office around the country to help make these broad mandates a reality on the ground. Since its formation, the task force has made great strides in facilitating increased inv estigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, v ictims, financial institutions and other organizations. Ov er the past three fiscal y ears, the Justice Department has filed more than 1 0,000 financial fraud cases against nearly 1 5 ,000 defendants including more than 2,7 00 mortgage fraud defendants. For more information on the task force, v isit www.stopfraud.gov .

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at www.justice.gov /fairhousing.

12-11 16

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[CONTENT] September 13, 2012 | the United States | the U.S. District Court | the Western District | North Carolina | Bank of America | the Fair Housing Act | the Equal Credit Opportunity Act ||| Bank of America ||| U.S. | Bank of America ||| Bank of America | the Equal Credit Opportunities Act |||  ||| October 10, 2012 | December 6 ||| Court | Robert J. Conrad | Bank of America | Bank of America ||| the Department of Justice | Bank of America | $370 million | about 200,000 ||| 42 months ||| June 5, 2013 | Magistrate | David S. Cayer |||  [SUMMARY] On September 13, 2012, the United States filed a lawsuit in the U.S. District Court for the Western District of North Carolina against Bank of America, alleging violations of the Fair Housing Act and the Equal Credit Opportunity Act. Specifically, the federal government alleged that Bank of America discriminated against disabled mortgage applicants by requiring all disabled applicants to submit a letter from their doctors indicating the amount of the disability income they received. In some cases, the U.S. claimed that Bank of America required disabled loan applicants to provide information about the nature and severity of their disability as a condition of receiving a mortgage. The federal government further alleged that Bank of America discriminated against applicants receiving public assistance in violation of the Equal Credit Opportunities Act. The federal government asked the court for an injunction as well as monetary damages.

A consent order was submitted on October 10, 2012 and later amended on December 6. The Court (Chief Judge Robert J. Conrad, Jr.) approved the order, which prohibited Bank of America from requiring applicants to submit a letter from a doctor and required Bank of America to institute a monitoring program, train staff on the new policies, maintain a complaint resolution program, and to compensate affected applicants. According to the press release from the Department of Justice, Bank of America paid a minimum of $370 million in the settlement to about 200,000 borrowers. The order was to remain in effect for 42 months following the approval date.  

On June 5, 2013, the case was reassigned to Magistrate Judge David S. Cayer. The consent order terminated without any further litigation, and the case is now closed.