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Bank of America will pay $4,000 each to some mortgage applicants whose applications were decided under an old version of the bank's underwriting guidelines, according to a proposed settlement agreement filed Thursday in the Eastern District of New York.

The proposed settlement, which is subject to approval by a federal judge, resolves prosecutors' claims that Bank of America had a policy of denying mortgage loans and home equity loans to adults who had legal guardianships or conservatorships.

"All of the adult applicants and property owners who were denied loans because they had a legal guardian or conservator pursuant to the policies … have a disability as defined by the Fair Housing Act," prosecutors wrote.

The mortgage guidelines were changed in 2016 and the home equity guidelines were changed in 2017, according to court documents; as a condition of the settlement, Bank of America agreed to maintain the new guidelines and to "ensure that applicants represented by legal guardians and conservators are treated in a manner that does not discriminate on the basis of disability, consistent with the requirements of the FHA," according to the agreement.

Bank of America also denied any wrongdoing or noncompliance with the Fair Housing Act.

Under the settlement, the bank will pay about $300,000 to victims, according to a news release from the U.S. Attorney's Office for the Eastern District of New York. For two years, the bank will make semiannual reports to the government regarding its compliance with the terms of the settlement and any complaints related to mortgages denied to adults with legal guardians or conservators.

Assistant Attorney General Eric Dreiband of the Department of Justice's Civil Rights Division said the department will continue to hold lenders accountable for violations of the FHA.

"No one in this free country should be denied access to the American dream merely because of a disability," he said. "The unalienable right to pursue happiness extends to all people, including those with disabilities, and purchasing a home is one way many people exercise this right."

A Bank of America spokesman said the bank's old policy related to "concerns about possible exploitation." The bank has a record of supporting clients and employees with disabilities, the spokesman said.