GREENWOOD VILLAGE, Colo.–Bellco Credit Union here has been sued by the Denver Metro Fair Housing Center in U.S. District Court of Colorado for allegedly discriminating against people based on their sex and familial status, including not giving mortgage loans to women while they were on or about to go on maternity leave.
The credit union has responded by strongly objecting to the allegations and saying the suit has “no merit.”
According to the suit, Bellco has continued to deny mortgage loans to women who are either on or facing impending maternity leave until the women return to work for at least 30 days, which DMFHC says is a direct violation of both state and federal fair housing laws, as well as Fannie Mae’s rules, TheDenverChannel.com reported.
The DMFHC said that it tested Bellco by having five women who were already on maternity leave or who said they were about to go on maternity leave apply for mortgages at the credit union.
“The women were all white in order to control the test, the suit says, and all had credit scores in the mid-700s, household incomes with two earners and money in their savings,” TheDenverChannel.com reported. “Two of the women were not on our about to go on maternity leave so as to control the test, the suit says.”
The lawsuit alleges that in all three cases in which the women said they were on or about to go on maternity leave, Bellco’s loan representatives told them they would have to return to work and provide one month’s worth of pay stubs in order to close on a home, despite some of them having alternate incomes from their husbands and, in one case, $72,000 in savings, the suit alleges.
“In one case, one of the Bellco workers ‘unequivocally communicated that women on maternity leave must return to work as a threshold condition to potentially qualify for a home mortgage loan from Bellco,’” TheDenverChannel.com reported.
The report cited U.S. Department of Housing and Urban Development (HUD) guidance that women do have the right to obtain a mortgage loan while on maternity leave.
The suit asks a federal judge to enjoin, or block, Bellco from continuing its practices. It further asks for both punitive and compensatory damages for Bellco’s alleged violations of the Fair Housing Act and Colorado Fair Housing Act, as well as attorneys’ fees and other reasonable costs, according to TheDenverChannel.com.
“The denial of home mortgage loans to women who are otherwise credit worthy because they are on maternity leave is not only unlawful, it severely limits women and families with children the ability to purchase or refinance a home and all the benefits that come with homeownership,” said DMFHC Executive Director Arturo Alvarado.
In a statement in response to the lawsuit, Bellco CU said, “For more than 80 years, Bellco has served as a trusted partner to our members in this community. Bellco has never knowingly engaged in any discriminatory lending practices of any kind. In particular, Bellco’s policies forbid any kind of discrimination based on the sex or familial status of applicants, including pregnancy and maternity leave. 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."