Suffolk Federal Credit Union has reached a settlement with Long Island Housing Services following charges that the credit union discriminated against African-Americans and Latinos who sought out information about its mortgage program.

The charges stem from a 2016 civil rights complaint filed by LIHS with the U.S. Department of Housing and Urban Development. The housing group’s complaint underlines that the credit union violated state laws against discrimination along with the federal Fair Housing Act.

LIHS says it ran five in-person paired tests in addition to four tests conducted over the phone. Each test encompassed an African-American or Latino applicant inquiring about refinancing a loan or purchasing their first home. In the same test-run, a less-qualified white applicant utilized the same methodology as the previous applicants and sought out the same information.

Ralph Spencer is president and CEO of Suffolk FCU
Ralph Spencer, president and CEO of Suffolk FCU

According to the group’s complaint, the less-qualified white applicant was favored by the credit union because they “received prompter and greater service.” The housing group’s test revealed that the African-American applicant received higher interest rate quotes than less-qualified white applicants.

The credit union denies “any allegation of engaging in discriminatory lending on a prohibited basis,” but has undertaken a variety of measures to protect against possible bias.

In response to the suit, the Medford, N.Y.-based credit union is set to increase staff training and hire a third-party group to test for discrimination by credit union employees. Suffolk FCU will also offer subsidies of up to $1,250 each to eight borrowers a year within certain areas of Suffolk County. The credit union will also now offer marketing materials in both English and Spanish, as well as a Language Access Line for applicants whose primary language is not English.

“Suffolk Federal Credit Union has a long history of serving the people of Suffolk County, and will continue to work to ensure equal access to mortgages and other financial opportunities for all members of our community,” Ralph D. Spencer, SFCU president, said in a statement. “As a member-owned cooperative, we determined that it was in the best interest of our members to resolve this matter with LIHS quickly rather than endure a lengthy and costly litigation process.”

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