HR Key Player In Managing Countrywide & Other US Discrimination Exposures

This week’s announcement by the U.S. Justice Department of the  largest residential fair lending settlement in history on December 21, 2011 highlights the widening scope of exposures that U.S. businesses face under a broad range of federal Civil Rights and other discrimination laws.   The settlement shows that discrimination risks are rising and that employment discrimination is only part of the problem. In addition to managing employment discrimination exposures in their employment practices, many businesses and business leaders also need to take steps to adequately recognize and provide policies, management controls and training to maintain compliance with federal disability and other discrimination laws prohibiting discrimination against disabled or other customers or others with whom they do business. 

Human resources and other management leaders should move quickly to help their organizations manage these risks and responsibilities.

Countrywide Settlement

This week’s Justice Department settlement with Countrywide Financial Corporation and its subsidiaries (Countrywide) provides for payment of $335 million in compensation to the more than 200,000 qualified African-American and Hispanic borrowers that Federal officials allege were victims of the widespread pattern or practice of illegal discrimination against qualified African-American and Hispanic borrowers by Countrywide while Countrywide served as one of the nation’s largest single-family mortgage lenders and originated more than 4 million residential mortgage loans.  Bank of America now owns Countrywide.

Federal officials charged Countrywide engaged in discriminatory mortgage lending practices against more than 200,000 qualified African-American and Hispanic borrowers from 2004 through 2008.  The Justice Department claimed it uncovered a pattern or practice of discrimination involving victims in more than 180 geographic markets across 41 states and the District of Columbia. These discriminatory acts allegedly included widespread violations of the Fair Housing Act and the Equal Credit Opportunity Act, and resulted in African-American and Hispanic borrowers being charged higher rates for mortgage loans – solely because of their race or national origin.

According to Attorney General Eric Holder, today’s settlement will compensate the more than 200,000 African-American and Hispanic borrowers who were victims of discriminatory conduct, including more than 10,000 African-American or Hispanic borrowers who – despite the fact that they qualified for prime loans – were steered into subprime loans. Subprime borrowers pay higher penalties and higher interest rates, have a greater likelihood of default and foreclosure than with prime loans, and other damages.

When announcing the settlement, Attorney General Holder reaffirmed the Obama Administration’s commitment to finding and prosecuting businesses that engage in illegal discriminatory practices.  To read Attorney General Eric Holder’s remarks, click here.

Discrimination Obama Administration Priority

Enforcing disability discrimination laws is a high priority of the Obama Administration Business leaders increasingly recognize the need to tighten procedures to manage disability discrimination risks.  

Human resources and other business leaders often recognize human resource related discrimination risks as requiring management.  The heightened emphasis of the Obama Administration on disability regulation and enforcement clearly is raising business responsibilities and exposures under these employment laws.  In order to manage these exposures effectively, however, it is important that businesses and their human resources leaders do not take for granted the adequacy of their current compliance and risk management efforts in light of the Obama Administration’s aggressive regulatory and enforcement agenda in this area.  See e.g.,  Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures In 2012; EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act; Update Employment Practices To Manage Genetic Info Discrimination Risks Under New EEOC Final GINA Regulations; EEOC Attacks Medical Leave Denials As Prohibited Disability Discrimination; Labor Secretary Comments Highlight Federal Protections & Resources To Support Veteran’s Employment Rights

Employment discrimination risks are not the only discrimination exposures that U.S. organizations need to be concerned about, however.  The Countrywide settlement joins a lengthy list of settlements and other actions by the Obama Administration against businesses and government entities for alleged violations of U.S. civil rights and other nondiscrimination laws.  See, e.g. Businesses Face Rising Disability Discrimination Enforcement RisksNew Obama Administration Affirmative Action Guidance Highlights Organization’s Need To Tighten Nondiscrimination Practices; OFCCP Proposed Increased Disability Hiring Targets, Other Tougher Government Contractor Rules another Sign Of Rising Employment Discrimination RisksIncentives To Get Employee Into Wellness Education Requires Legal Risk Management; New School Racial Accommodation Guidance Gives Important Insights For Schools & Other Organizations On Obama Administration Affirmative Action Enforcement; Justice Department Landlord Suit Shows Businesses Face Rising Disability Discrimination Enforcement Risks; Big Penalty for Lender Shows Risks of Violating Military Service or Vets Rights; OCR Requires Rhode Island DHS To Provide Translation, Other Services For Limited English, Other Language Impaired Accommodations.

These regulatory, audit, enforcement and other actions show that private businesses and state and local government agencies alike should exercise special care to prepare to defend their employment and other business practices  against potential disability or other Civil Rights discrimination challenges on a broad range of fronts. 

HR Key Player

Human resources professionals are key players to efforts to effectively manage their organization’s overall discrimination risks and responsibilities by managing compliance throughout the organization.

All organizations, whether public or private need to make sure both that their organizations, their policies, and people in form and in action understand and comply with current disability and other nondiscrimination laws.  When reviewing these responsibilities, many state and local governments and private businesses may need to update their understanding of current requirements.  

Federal nondiscrimination and other laws have been expanded or modified in recent years by statutory, regulatory or enforcement changes, risk management efforts should begin with an assessment of the adequacy of existing policies and practices in light of the latest rules and enforcement actions.  Based on this assessment, business and governmental organizations should update policies and procedures as required, tighten documentation, and conduct ongoing, well-documented audits and training to mitigate exposures.

Human resources and other management leaders should position their organizations to guard against rising enforcement of these laws by updating policies, oversight and training to ensure that their workers and business partners recognize and know how to conduct themselves properly to fulfill responsibilities to persons with disabilities or others with whom the business deals who may be protected under Federal or state disability discrimination laws.  In addition to adopting and training workers on policies requiring compliance with these laws, businesses should include contractual provisions requiring compliance with these laws in leases and other relevant business contracts.  Most businesses also may want to provide and post information about processes that customers or others who may have a concern about the needs of persons with these special needs to position the business to address concerns that otherwise might go unnoticed until they arise to the level of an agency or other legal  complaint.

If you need assistance in conducting a risk assessment of or responding to a challenge to your organization’s existing policies or practices for dealing with the issues addressed in these publications or other compliance, labor and employment, employee benefit, compensation, internal controls or other management practices, contact attorney Cynthia Marcotte Stamer.

For Help With Compliance, Risk Management & Defense

If you need help in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.  If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available at

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For more information about Ms. Stamer and her experience or to get access to other publications by Ms. Stamer see here or contact Ms. Stamer directly.

©2011 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press, Inc..  All other rights reserved.

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