On behalf of married couple S.R. and D. R., Relman Colfax has settled a HUD fair housing complaint alleging familial status and disability discrimination by Philadelphia’s Police and Fire Federal Credit Union (“PFFCU”). The complaint alleged that PFFCU denied the couple a home renovation loan because S.R. was on maternity leave. The settlement calls for policy revisions and training as well as $50,000 in damages and attorneys’ fees.
On March 31, 2022, HUD approved a conciliation agreement that requires PFFCU to:
- Commit to underwriting policies that include maternity and paternity leave as a form of short-term leave;
- Permit future borrowers on paid short term or parental leave to close loans before they return to work and to use FMLA and other short-term disability payments to qualify for loans;
- Permit future borrowers on parental leave who will not return to work before the date of their first mortgage payment to provide available supplemental resources in order to qualify for a loan;
- Train loan officers and underwriters on provisions of the settlement and on fair lending principles generally;
- Pay the couple $50,000 for damages and attorneys’ fees.
HUD will also monitor compliance with the agreement for 3 years.
The Firm filed a HUD administrative complaint on November 4, 2021, alleging that the couple’s treatment violated the Fair Housing Act based both on familial status, which protects against housing discrimination based on pregnancy, and on disability, because the credit union treated the couple’s income as if the wife were on disability leave.
The complainants applied for a home renovation loan from PFFCU in February 2021, when S.R. was on maternity leave after the birth of their second child. Throughout that leave, she was receiving her full salary pursuant to the Family Medical Leave Act (“FMLA”) and had a firm date to return to work.
After provisionally approving their loan application, PFFCU refused to complete processing when it learned S.R. was on maternity leave and told the couple that they would have to reapply for a loan after she returned to work. PFFCU did not inquire as to the date of her expected return to work, or about the assets available during her leave; instead, it refused to close her loan because of her FMLA paid leave and said she would have to return to work and have at least two pay stubs without FMLA before PFFCU would consider the loan.
The Relman Colfax team included Reed Colfax and Sara Pratt.
A copy of the complaint can be found here. The settlement agreement is here.