Big bank discriminates against pregnant women -- HUD

One of the nation's largest lenders will pay millions to settle allegations that it discriminates against pregnant women seeking home loans

The U.S. Department of Housing and Urban Development (HUD) has reached a $5 million settlement with Wells Fargo Home Mortgage, resolving allegations that the lender discriminated against women who were pregnant or had recently given birth and were on maternity leave.

The Fair Housing Act makes it unlawful to discriminate in real estate related transactions, including the provision of home mortgage loans, on the bases of race, color, national origin, religion, sex, disability or familial status.

“The settlement is significant for the six families who had the courage to file complaints and for countless other families who will no longer fear losing out on a home simply because they are expecting a baby,” said HUD Secretary Julián Castro. “These types of settlements get us closer to ensuring that no qualified family will be singled out for discrimination.”

Under the settlement, the lender will distribute a total of $165,000 to the six affected families; create a fund with at least $3.5 million to compensate other Wells Fargo applicants who experienced maternity discrimination when they applied for a loan; and pay as many as 175 claimants $20,000 each.

Wells Fargo will also change its underwriting guidelines when it comes to evaluating mortgage loan applications from those on maternity leave to ensure they are not discriminatory. The new guidelines clarify how underwriters must evaluate and process mortgage loan applications from applicants on parental leave, including maternity leave, when they apply for a loan.

Since 2010, 190 maternity leave discrimination complaints have been filed with HUD, resulting in more than 40 settlements for a total of nearly $1.5 million, prior to the Wells Fargo settlement.

To read more about the settlement, click here.