Credit Union Sued for Discriminatory Lending Practices
A fair housing organization is claiming the $3.7 billion Bellco Credit Union discriminated against women by denying them mortgages because they were on maternity leave, according to a federal lawsuit filed in U.S. District Court in Denver last month.
In a statement Wednesday, the Greenwood Village, Colo.-based credit union denied the state and federal allegations of discriminatory lending practices.
"To our knowledge, no one ever applied for, nor was denied a home loan based on the call recordings from the Denver Metro Fair Housing Center,” the credit union said. “We believe the allegations in the suit could have been addressed between our two not-for-profit companies directly instead of through a lawsuit where valuable resources are being spent on attorneys and court costs. Our attorneys are investigating the specific allegations in the complaint and will respond to them in court, but we are confident that the lawsuit has no merit."
DMFHC said it conducted telephonic testing of several banks in the Denver area to determine if any were discriminating against women on maternity leave, which violates state and federal laws.
“The DMFHC’s testing revealed that Bellco maintains discriminatory policy of denying home mortgage loans to women on maternity leave, and requiring that a mother return to work for at least 30 days before Bellco will even consider her home mortgage loan application, regardless of whether the leave is paid or unpaid and regardless of whether she has liquid savings to compensate for any temporary salary reduction resulting from her maternity leave,” according to the lawsuit.
Between May and August 2016, the DMFHC said it conducted five telephone tests of Bellco to determine whether the credit union discriminated based on a would-be borrower’s maternity leave status. Each tester posed as a female who had a credit score in the mid-700s, a household income with two earners and adequate savings for a down payment. Each tester who spoke to a Bellco loan officer expressed interest in buying a home and asked basic questions about the credit union’s mortgage process, loan options and interest rates.
Two of the female testers said they were not on or about to go on maternity leave when they spoke with loan officers. Three of the testers said they were on maternity leave when they spoke with Bellco loan officers.
When the three testers who said they were on maternity leave revealed that information, three different Bellco loan officers told the testers that they would need to return to work in order to close on the home, according to the lawsuit.
In one example, the fourth tester reminded the Bellco loan officer that she was on paid maternity leave.
“He [the loan officer] responded that Bellco still would not consider her earnings until she had returned to work for a month because ‘[a] lot of people say they are going to go back to work and then they don’t so that is why we require that you actually are back at work in order to use your income,’” according to the lawsuit.
Despite these specific allegations, Bellco insisted it has never knowingly engaged in any discriminatory lending practices of any kind.
“Bellco policy forbids any kind of discrimination based on the sex or familial status of applicants, including pregnancy and maternity leave,” the credit union stated.
The DMFHC is asking for unspecified compensatory damages and punitive damages.
Bellco is expected to answer the lawsuit’s specific charges by May 4, according to court records.