A Denver fair housing organization has filed suit against Bellco, alleging that the credit union illegally denies mortgages to women on maternity leave.
The Denver Metro Fair Housing Center, a nonprofit seeking to root out housing discrimination, says Bellco – which has branches statewide – tells women who are on maternity leave that they cannot qualify for a home loan until they have been back at work for at least four weeks, with pay stubs to prove it. That policy, the housing center says, violates both federal and state fair housing laws and is in direct conflict with federal department of Housing and Urban Development (HUD) guidelines.
The Fair Housing Act prohibits discrimination in lending based on sex and familial status. According to HUD, the Act protects women on maternity leave from lending discrimination if they can demonstrate they intend to return to work and “can otherwise continue to meet the income requirements to qualify for the loan.”
In a statement, Bellco said 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’s attorneys are investigating and will respond in court, the statement says, “but we are confident that the lawsuit has no merit.”
HUD has been investigating banks for discriminating against pregnant women and women on maternity leave since at least 2010. According to agency spokeswoman Maria Elena Gaona, HUD has received almost 150 complaints alleging maternity-leave discrimination since 2010 and has obtained more than $8 million in compensation for victims. The number of complaints has dropped significantly over the years. In fiscal year 2016, the agency received only nine complaints, she said.
To determine whether such discrimination might be happening locally, the Denver Metro Fair Housing Center had testers claiming to be on maternity leave call several banks, including Bellco.
According to the suit, five testers, all white women, spoke to four different Bellco loan officers last summer. The testers said they had credit scores in the 700s, were living in two-income households with stable incomes and that they had enough money for a down payment. Two of the callers made control calls – they did not say they were on maternity leave.
The other three testers said they were on maternity leave. The Fair Housing Center’s executive director Arturo Alvarado said the responses were consistent: Loan officers told the testers who said they were on maternity leave that if they wanted their incomes to be considered as part of the loan, they must return to work for at least a month.
The center provided The Colorado Independent with excerpted audio of three calls. One went as follows:
Loan officer: “….to use your income, you’ll have to be to working.”
Loan officer: “Otherwise we’d only be able to qualify you on [your partner’s] income.”
Tester: “Um, I am on paid maternity leave. Does that make a difference?”
Loan officer: “Uh, no. You would have to be back, full-time and working in order for us to consider your income. A lot of people, they say they’re going to go back to work and then they don’t.”
Loan officer: “So, that’s why we require that you are back to work in order to use your income.”
In another call, a different loan officer told the tester that the couple could purchase a home, but that she (the tester) must be back at work and “receive 30 days worth of pay stubs before we could actually close.”
“So, it has to be 30 days back at work. Can I ask why? I’m just curious,” the tester asked.
“Basically what they’re looking to do is just to make sure you do return to work and at the same pay and so they want to see the pay stubs when you get back to your job,” the loan officer responded.
Alvarado said the consequences of this policy are that some women may choose to end maternity leave early in order to buy a home “at a time they should be enjoying their baby instead of being discriminated against.” The pressure to return to work is especially acute in Denver’s tight housing market, he said. With homes getting multiple bids, Alvarado said, a woman who is on maternity leave could lose out on an opportunity to buy a home.
Bellco’s statement noted that it is a not-for-profit, like the Denver Metro Fair Housing Center, and that the allegations could have been addressed nonprofit-to-nonprofit, rather than in court. Alvarado said such discussions were attempted, to no avail. He noted that the Fair Housing Act passed in 1968 and was amended in 1974 to prohibit discrimination on the basis of gender and again in 1988 to include protections for familial status. “Lenders should know this,” he said.
The lawsuit seeks a court order prohibiting Bellco from pursuing policies that discriminate against women on maternity leave, as well as unspecified compensatory and punitive damages and attorneys’ fees. Bellco has until May 4 to respond.
Photo by Jerry Lai via Flickr: Creative Commons