HUD and Bank of America Do Settlements The Right Way, Win Policy Changes for Gays

The U.S. Department of Housing and Urban Development, commonly called HUD because that’s a fucking mouthful, took issue with Bank of America’s denying a loan to a lesbian couple in Florida. An unnamed lesbian couple applied for a Federal Housing Administration insured mortgage and, because one partner is currently unemployed, the applicant listed the unemployed partner’s mother as a co-signer for a loan. The bank was like, yeah, you’ll totes get a loan (clearly I’m paraphrasing there) and then, at the last second, Bank of America denied them a loan because the unemployed partner’s mother wasn’t technically related to the applying partner because the lesbian couple was not married. It’s actually impossible for the couple to be married in the state of Florida, which does not even recognize out-of-state marriages.

via think progress

via think progress

HUD has an Equal Access Rule, which reads:

“HUD implements policy to ensure that its core programs are open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status. This rule follows a January 24, 2011, proposed rule, which noted evidence suggesting that lesbian, gay, bisexual, and transgender (LGBT) individuals and families are being arbitrarily excluded from housing opportunities in the private sector.”

Preach, HUD. And because of this rule HUD was able to act on the fact that it’s a direct violation due to both sexual orientation and marital status, and took action against Bank of America for denying this couple a loan based on marital status. This was the organization’s first legal action based on its new equality rule, enacted in 2011.

And you know what happened?

Bank of America actually listened.

HUD logoInstead of just settling for a huge sum of money like Americans in the private sector normally do when faced with legal action, HUD asked for a relatively small sum of money ($7,500) and actual policy changes. Bank of America settled by agreeing “to notify its residential mortgage loan originators, processors and underwriters of its Settlement Agreement with HUD. In addition, BOA will remind its employees that they are prohibited from discriminating against FHA-loan applicants on the basis of sexual orientation, gender identity or marital status.  BOA will also update its fair lending training program to include information on HUD’s rule.”

Bully for you HUD, and kudos to Bank of America (a phrase I would have never imagined myself typing). Helen Kanovsky, HUD’s general council, said “BOA should be commended for stepping up and taking immediate corrective action after HUD notified BOA of the violation.”

This story is important for several reasons.

First, this would have never happened had a private sector company been in charge of enforcing this law, a sign that we do need governments to protect citizens. Even though Bank of America did correct their policy right away, if the enforcer had just asked for a butt load of money instead of a solution, that’s probably what would have happened. So when you next hear an argument for cutting government offices to the bone, point at this. Government and business working together to ensure that everyone is treated fairly may not have happened if two private sector companies were duking it out.

Second, I find this legal decision to be extremely understanding of the current legal climate in the state of Florida. Everyone seems to understand that, to the extent that the marital status of the couple was a factor in obtaining a mortgage, this couple is not be able to get one. This is an understanding that always appears to be generally overlooked in mainstream, religious based arguments for or against gay marriage. It’s useful to be able to point to an actual event and say, this. This causes problems. Here are the legal problems it causes that have nothing to do with personal moral code. And it queers the institution a little bit because now mortgage can’t rely on marital status anyway. Many of the arguments within the queer community center around the idea of the institution of marriage not being a historically queer ideal. Many LGBT people who do not believe in marriage equality hold their beliefs because they do not believe in marriage. While I think we do need to fight for marriage equality because no one should be denied this contract that makes existing in a country with laws a little bit easier, I find this rule and the enforcement of it to be more inline with the historical queer rejection of the institution of marriage: that it is unnecessary for this particular aspect of life.

Third, HUD is using this settlement as an example. John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in his statement:

“The HUD Equal Access Rule means just what it says:  one’s sexual orientation, gender identity or marital status is not a legitimate basis on which to deny a mortgage. Members of the housing industry should take note of this settlement agreement.  HUD will enforce its regulations to make sure its programs are truly open to all qualified families.”

Which brings me to my final point –

HUD is an ally

Fourth, the Department of Housing and Urban Development has basically just declared itself an ally, so let’s use the resources they have. Just like members of the housing industry should take note of the settlement agreement, we should take note of this particular governmental agency, which seems to have our backs (at least in this particular regard). So check them out if you’re looking for housing, whether you want to find an affordable apartment (a search in Brooklyn actually brings up my apartment building and other buildings on my street. Welcome neighbor!) or buy a home. Or perhaps you want to follow the darn cutest government blog I’ve ever seen, the HUDdle. You can report discrimination like the kind faced by the lesbian couple in Florida on a website that is legit covered in rainbow flags. This might actually be one of the most helpful government websites I’ve ever seen. And in a time when finding and being able to afford housing is a crisis for many people in America, it’s great to see a reason to be hopeful.

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A.E. Osworth

A.E. Osworth is part-time Faculty at The New School, where they teach undergraduates the art of digital storytelling. Their novel, We Are Watching Eliza Bright, about a game developer dealing with harassment (and narrated collectively by a fictional subreddit), is forthcoming from Grand Central Publishing (April 2021) and is available for pre-order now. They have an eight-year freelancing career and you can find their work on Autostraddle (where they used to be the Geekery Editor), Guernica, Quartz, Electric Lit, Paper Darts, Mashable, and drDoctor, among others.

A.E. has written 542 articles for us.


  1. thank you for writing about this, ali. i was all set to be angry at the conclusion but then it wasn’t anger-inducing. also thank you for pointing out all the concrete ways we can use this specific incident to help our community in the long run.

  2. This is an amazing article, thank you for give us this story. I am amazed by how HUD and Bank of America worked in this case, I hope more good news from more companies and government agencies working like this.

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