Fifth Third Bancorp’s (FITB) mortgage unit has reached over $1.5 million settlement with the U.S. Department of Justice to resolve charges of discrimination against some loan applicants on the basis of disability and receipt of public assistance. The settlement was filed with the U.S. District Court in Macon and is subject to court approval.
It was alleged that Fifth Third’s mortgage unit insisted that the mortgage loan applicants should provide letters from their doctors in order to document the income they obtained from Social Security Disability Insurance. This practice of discrimination led to violation of the Fair Housing Act ('FHA') and the Equal Credit Opportunity Act ('ECOA').
According to the Justice department, Fifth Third fully cooperated with the department’s inquiry into its lending practices. The company’s settlement amount will compensate the eligible mortgage loan applicants. Further, the company will improve its policies, undertake training of its underwriters and loan officers, and ensure that loan applicants with disability are not asked for letters from their doctors.
Fifth Third currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the finance sector include AllianceBernstein Holding L.P. (AB), Piper Jaffray Companies (PJC) and Cohen & Steers Inc. (CNS). All these sport a Zacks Rank #1 (Strong Buy).