Bank of America Defends Lending Practices Against CAP Accusation

Since acquiring Countrywide in 2008, Bank of America (BAC) said it has taken increased measures to ensure fair and responsible lending. The comments came after a report issued by the Center for American Progress (CAP) questioned why black and Hispanic borrowers were sold higher-priced mortgages at a greater rate than white and Asian borrowers. In addition, the bank has ceased originating a number of loan products critics have labeled as risky, including subprime mortgages, high-cost loans, option adjustable-rate mortgage (ARM) loans, no-income/no-asset or no-ratio loans, and it has significantly curtailed origination of other non-traditional mortgages such as low-documentation loans, a Bank of America spokesperson said. “As we continue the integration of Countrywide, the practices and commitments that established Bank of America’s positive reputation and record in home lending will guide the combined companies,” Bank of America spokesperson Jumana Bauwens said in an e-mail. Bauwens said the data used in the research, which came from bank-generated reports submitted to the federal government by mandate of the Home Mortgage Disclosure Act, does not present a complete picture of a financial institution’s lending practices, and that the bank embraces fair and responsible lending principles in all its activities. In that vein, Bank of America said it now gives borrowers a one-page document that summarizes the terms of a loan in “straightforward language,” and launched an interactive Web page to help prospective borrowers evaluate their financing options. Write to Austin Kilgore.

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