The $1 billion Suffolk Federal Credit Union reached an agreement with the Long Island Housing Services Inc. resolving its 2016 civil rights complaint alleging the Medford, N.Y.-based credit union discriminated against African Americans and Latinos when they sought or applied for mortgages.
As part of the agreement, SFCU Ralph D. Spencer Jr. said the credit union denies all of the discrimination allegations, but nonetheless decided a settlement would work in the best interests of the credit union's 57,341 members.
"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," Spencer said in a prepared joint statement with LIHS released Monday. "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."
Recommended For You
LIHS' investigation conducted in 2015 said its African-American and Latino testers who posed as borrowers inquired about mortgages. The LIHS African-American and Latino borrowers were provided with less or no information about the credit union's mortgage products and were directed to conduct a self-search on SFCU's website. LIHS' white borrowers, however, received quicker and greater service, responsive follow up communication, and were offered appointments with loan officers. They also generally received much greater detail about loan products, according to the LIHS complaint filed through the U.S. Department of Housing and Urban Development.
All LIHS borrowers had similar financial profiles, but the minority borrowers had slightly higher credit scores and income as well as less debt than LIHS white borrowers, the housing organization said.
However, LIHS' investigation found that African-American and Hispanic borrowers were denied mortgages at a much higher rate than their white counterpart borrowers compared to SFCU peers.
Over the past year, the credit union has worked with LIHS to review and improve its policies and procedures and marketing efforts throughout the credit union's underserved communities, including in zip codes identified by LIHS, according to a joint statement.
SFCU has agreed to offer a down payment and a closing assistance subsidy program to potential homeowners or current homeowners from the targeted zip code areas for the purchase of a primary residence (including refinance or second purchase) in the amount of $1,250. This program will be offered to eight qualifying applicants annually over the next three years.
The credit union also agreed to conduct additional fair lending training for all employees with borrower interactions relating to residential lending and will continue fair lending training for the credit union's employees who regularly interact with members.
The agreement also calls for SFCU to retain an independent third party to conduct an enhanced fair lending self-testing program to identify potential customer service or discrimination issues.
"We are happy to be able to partner with our fellow Long Islanders at SFCU to increase the access to mortgage opportunities for communities that have historically had difficulty obtaining access to credit," Ian Wilder, LIHS executive director, said.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
