Beating up Bank of America has become a national sport (one which this bolgger occasionally plays). However, every banker's blood boils vicariously when he or she reads about the latest Fair Lending Act lawsuit (with a pinch of alleged ECOA violations thrown into the soup for flavor) filed by the ironically named "Justice Department" against B of A. The Justice Department alleged that violations occurred because the bank required home loan applicants who relied on Social Security disability payments to meet "extra burdens," including providing letters from doctors that documented that income.
"Loan aplicants with disabilities should not be subjected to invasive requests for medical information from a doctor when they applying for credit," said Thomas Perez, assistant attorney general in the Justice Department's civil rights unit.
Perez is the same guy who's been pushing the envelope on "disperate impact" claims. At least, he's been pushing them until they reach the US Supreme Court, at which point he backs off, and urges others with similar claims to back off, because he understands that the SCOTUS is likely to blast him out of the water. It's much easier to bring these cases with no SCOTUS precedent, so you can use the prospect of paying millions of dollars to defense lawyers as a cudgel to extract ransom from financial institutions who would rather settle than fight a protracted battle with an unaccountable enemy. That's what Bank of America apparently decided.
An especially irksome aspect of this latest case is raised by the bank.
"The government's position has been inconsistent regarding whether a doctor's note should be requested," the bank said in a statement. "HUD determined this policy is in compliance for its loans, yet suggests it somehow violates the Fair Lending Act for non-HUDS loans. Same statute, same alleged conduct, different result. We're being accused of wrongdoing by the government for following a policy the government approved."
Welcome to 1984.
