In October, the National Community Reinvestment Coalition filed a complaint with the Department of Housing and Urban Development, claiming a Movement loan officer engaged in discriminatory practices in two separate testing scenarios conducted months apart by the Washington, D.C.-based nonprofit. In each instance, NCRC found that Dave Skow, based in Seattle, provided less loan .rmation and follow-up along with fewer product options to the organization’s Black test applicant compared to a white test borrower, actions which would violate the Fair Housing Act.
In a conciliation agreement, Movement will pay $65,000 to NCRC, as well as donate $10,000 to a Seattle-area nonprofit providing financial literacy and housing education in local majority-minority neighborhoods. The Fort Mill, South Carolina-based company will also conduct an event in the greater Seattle area tied to its Grab the Key Initiative, aimed at increasing Black homeownership across the country. Movement employees will undergo additional fair-lending training as well.
“This agreement reflects HUD’s commitment to ensuring that everyone has equal access to credit regardless of their race or national origin,” said Demetria L. McCain, HUD’s principal deputy assistant secretary for fair housing and equal opportunity, in a press release. “It is imperative that lenders comply with fair housing laws.”
The agreement was not intended to be an admission of fault or violation of the Fair Housing Act, both HUD and Movement Mortgage said.
“Movement Mortgage was founded on the mission of serving others, particularly the underserved, minorities and low-income families, and we have dedicated hundreds of millions of dollars to do that.” the company said in a statement .ed to National Mortgage News. “Because of our ongoing commitment to the people in those communities, we agreed to settle this matter, but continue to deny that we engaged in any of the discriminatory actions alleged.”
Earlier this year, Movement also created a new leadership role within the company focused specifically on increasing diversity in lending and business partnerships.
NCRC was satisfied with a “good and swift resolution” that provided not only redress but additional education and training, said General Counsel Brad Blower. NCRC consists of 625 organizations focused on developing wealth-building opportunities across the U.S..
In the complaint, NCRC indicated it had previously conducted fair-lending compliance training in 2019 to a group of Movement employees at the company’s request.
“It demonstrates that training is important, but also continued monitoring and vigilance is important too,” Blower underscored in an interview with National Mortgage News.
“A couple of years can pass, new employees can come in,” he said. “People forget — ‘Look, I had this training,’ but ‘Oh, not providing all the same .rmation to different applicants could be a violation of fair housing.’”
The resolution comes as HUD and other federal agencies have increasingly shown their intent to address redlining concerns and potential violations of fair-lending laws under the Biden Administration. Earlier this year, Bank of America reached a conciliation agreement with HUD to settle a claim brought forth by a family denied approval due to a member’s maternity-leave status.
Currently, HUD is also reviewing a separate complaint filed by NCRC last year against Fairway Independent Mortgage after Home Mortgage Disclosure Act data and similar secret testing found potential redlining and fair-lending violations.