| HUD No. 06-060
June 5, 2006
HUD OBTAINS SETTLEMENT FROM CINCINNATI-BASED BANK FOR ALLEGEDLY DISCRIMINATING IN MORTGAGE LENDING
Fifth Third Bank settles Fair Housing complaint for $125,000
WASHINGTON, D.C. - The U.S. Department of Housing and Urban Development today announced it has settled a case against Cincinnati-based Fifth Third Bank for alleged lending discrimination. HUD's Office of Fair Housing and Equal Opportunity (FHEO) pursued the case on behalf of Nannette Bishop, an African-American, who alleged that she was denied a loan to purchase a house in Newport, KY, solely because of her race.
In August 2003, Bishop applied for a $70,000 loan to buy a house that cost $130,000. She had expected to receive another $60,000 from a private, non-profit United Way agency under a special second-chance subsidy program that helps consumers who have blemishes in their credit histories.
Bishop alleged that in September 2003 Fifth Third Bank denied her loan because she allegedly failed to meet the bank's underwriting guidelines. Bishop, however, believed she was really being discriminated against because of her race. HUD's investigation revealed that during the same time Fifth Third was disapproving Bishop's loan request, it approved loans for individuals who had credit histories worst than Bishop's.
"Americans deserve to be treated fairly when they attempt to obtain a mortgage - the biggest financial commitment most of us will ever make," said Kim Kendrick, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "Through this settlement, Ms. Bishop has been compensated for the harm she suffered."
Fifth Third Bank denied Bishop's allegations, but to settle the matter, agreed to pay her $125,000. In addition, the bank agreed to, among other things:
- Increase the Qualified Community development lending from $5 to $7 million for northern Kentucky and increase the lending from $40 to 50 million;
- Start funding loans from the Community Development Corporation in Northern Kentucky up to $500,000 and in Cincinnati up to $5.5 million;
- Donate one Real Estate Owned (REO) property and $10,000 dollars for rehabilitation to Housing Opportunities of Northern Kentucky;
- Donate two REO properties and $10,000 dollars in grant money for each property's rehabilitation to an affordable housing agency in Cincinnati;
- Maintain participation in Greater Cincinnati Micro-Enterprise Initiative;
- Maintain and increase participation in Cincinnati Development Fund from $5 million to $7 million; and
- Maintain Bancorp standards relating to financial education service standards by offering 35 homebuyer-training classes and 24 basic financial literacy classes.
"Fifth Third Bank has agreed to make a substantial commitment to create affordable lending opportunities," Kendrick said. "Every qualified person has the right to obtain the financing needed to purchase the home of their choice."
FHEO and its partners in the Fair Housing Initiatives Program and the Fair Housing Assistance Program investigate approximately 9,000 housing discrimination complaints annually.
People who believe they are the victims of housing discrimination should contact HUD at (800) 669-9777, or the Department of Justice at (800) 896-7743 or (202) 514-4713. Additional information is available at www.hud.gov/fairhousing and www.usdoj.gov.