WASHINGTON (Reuters) - The U.S. Department of Housing and Urban Development (HUD) filed charges on Friday against Bank of America (BAC.N) and two of its employees, saying they wrongfully discriminated against prospective Hispanic mortgage borrowers in South Carolina.
HUD said it expects its case against the bank will be heard in federal court, where a judge could potentially order the bank to pay damages, attorneys fees or other equitable relief.
A Bank of America spokesperson did not have any immediate comment.
This is not the first time that Bank of America has faced allegations of discrimination.
The Supreme Court is currently weighing whether to let Miami pursue lawsuits accusing both Bank of America and Wells Fargo & Co (WFC.N) of engaging in predatory lending against black and Hispanic home buyers.
The city accused the banks of steering those borrowers into higher-cost loans that they could not afford.
The banks are seeking to quash the lawsuit, arguing that the kind of monetary recovery being sought by Miami is not covered by federal law. A ruling on that case is due by the end of June.
The Fair Housing Act makes it illegal to deny or discriminate against people based on race, color, national origin, religion, sex, familial status or disability when it comes to issuing mortgages or mortgage modifications.
HUD’s case on Friday against Bank of America was prompted by a complaint filed by the National Fair Housing Alliance.
The alliance raised concerns about possible discrimination, after it conducted a series of “tests” in February 2013 through January 2014 to compare how bank employees treated female Hispanic versus non-Hispanic female prospective borrowers in a Charleston-based branch of the bank.
The Hispanic borrowers were offered less favorable lending terms compared with the non-Hispanic borrowers and the bank was less prompt in helping connect the Hispanic borrowers with the loan officer, the testing found.
For instance, one non-Hispanic borrower received an estimate with lower closing costs and monthly payments, as well as an offer by the bank to pay $2,000 of her closing costs.
The Hispanic borrower, by contrast, would have faced higher monthly payments and did not receive a similar offer for the bank to cover her closing costs.
Reporting by Sarah N. Lynch; Editing by Tom Brown and David Gregorio