August 7, 2014 / 8:50 PM / 5 years ago

UPDATE 2-Fifth Third to pay $1.5 mln in mortgage loan bias case

(Adds Fifth Third statement, paragraph 6)

WASHINGTON, Aug 7 (Reuters) - Fifth Third Bancorp Inc’s mortgage unit will pay $1.52 million to settle U.S. government charges that it discriminated against some loan applicants by demanding letters from doctors to document income from Social Security disability insurance.

The U.S. Department of Justice on Thursday said the accord resolves allegations that the unit violated the federal Fair Housing Act and Equal Credit Opportunity Act by discriminating on the basis of disability and receipt of public assistance.

Cincinnati-based Fifth Third will pay the money into a fund to compensate eligible victims. It will also improve training of loan officers and underwriters, and monitor loan applications to ensure that disabled applicants are not asked for letters from their doctors.

The accord “protects those with disabilities from having this unnecessary, inappropriate and illegal intrusion into the most private of their affairs,” U.S. Attorney Michael Moore in Macon, Georgia, said in a statement.

Settlement papers were filed with the U.S. District Court in Macon, and Fifth Third cooperated fully with the probe, the Justice Department said.

In a statement, Fifth Third said it is pleased to settle, and “remains committed to making mortgages available on a fair and equitable basis.” The lender has about 1,300 branches and 2,600 automated teller machines in a dozen U.S. states. (Reporting by Aruna Viswanatha and Jonathan Stempel; Editing by Leslie Adler and Grant McCool)

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