MEDFORD, N.Y.–Suffolk Federal Credit Union has reached a settlement with a Long Island housing group over charges it discriminated against African-Americans and Latinos who sought information about mortgage loans.
Suffolk FCU will offer subsidies of up to $1,250 each to eight borrowers a year for three years in certain Suffolk County ZIP codes, provide more staff training and hire a third-party group to test for discrimination by credit union employees, Suffolk Federal said in a statement that was first reported by Newsday.
The statement was released jointly with Long Island Housing Services, which made the allegations against the credit union in a 2016 federal complaint.
The credit union said in the agreement signed this month that it “denies any allegation of engaging in discriminatory lending on a prohibited basis,” Newsday reported.
‘Long History of Serving People’
In a statement, SFCU President/CEO Ralph D. Spencer said the credit union “has a long history of serving the people of Suffolk County, and will continue to work to ensure equal access to mortgages and other financial opportunities for all members of our community. As a member-owned cooperative, we determined that it was in the best interest of our members to resolve this matter with LIHS quickly rather than endure a lengthy and costly litigation process.”
In addition, Suffolk Federal said it will offer marketing materials in English and Spanish and a language access line for applicants whose primary language is not English.
In the housing group’s 2016 complaint, filed with the federal Department of Housing and Urban Development, Long Island Housing Services said the credit union violated the federal Fair Housing Act as well as state and county laws against discrimination, Newsday reported.
‘Paired Tests’ Conducted
“The group said it looked for discrimination at the credit union by conducting five in-person ‘paired tests’ and four tests over the phone,” Newsday said. “In each test, an African-American or Latino applicant asked for information about refinancing a loan or buying his or her first home, and a slightly less qualified white applicant sought the same information, using the same approach, the housing group said.”
Long Island Housing Service said in its complaint that despite having inferior credit scores and incomes and more debt, the white applicants “received prompter and greater service.” The group further alleged that in one paired test, the African-American tester was quoted a higher interest rate than the less-qualified white tester.