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Uptick in Lender Complaints Over Maternity Leave

When considering loan applications, lenders can’t consider maternity leave without violating a Fair Housing Act protected class. But complaints suggest some do anyway.

WASHINGTON – Women claiming maternity leave discrimination have filed federal complaints and lawsuits against lenders. Fair housing advocates suggest the number likely is much higher – but a lack of education and consistency in regulatory oversight have held back efforts to address the problem.

Many women may not even know it’s illegal for a lender to factor in their maternity leave and therefore may not file a complaint.

“It definitely is still happening today,” says Morgan Williams, general counsel of the National Fair Housing Alliance. “It comes up regularly.”

Lenders may be concerned that after maternity leave, women might decide not to return to their job and then be unable to continue paying their mortgage. But denying a mortgage to a woman due to maternity leave is a violation of the equal credit and fair housing laws.

“It emerged as a significant problem across the lending industry starting in 2010,” Sara Pratt, a civil rights attorney with Relman Colfax, told MarketWatch. “Although some of the largest lenders in the country have become aware of this through complaints and have changed their policies, there are still many lenders who are following outdated discriminatory rules.”

In 2012, Bank of America agreed to pay more than $160,000 after women on maternity leave claimed the bank wouldn’t refinance their mortgages. In 2014, the Department of Housing and Urban Development reached a $5 million settlement with Wells Fargo Home Mortgage on similar maternity discrimination allegations.

Fair housing advocates say they want to see more organized and consistent effort from the federal government to educate lenders about maternity leave discrimination. They also want greater oversight.

“Right now what is happening is cases against individual lenders,” Pratt told But she is pushing for “federal regulators [to] consistently come out with instructions to lenders about nondiscrimination against families where a woman or a man is on a leave related to pregnancy or childbirth.”

Source: “Maternity Leave vs. Mortgage: Some Lenders Claim Women Can’t Have Both,”®/MarketWatch (June 15, 2021)

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