A major faith-based foster care and adoption contractor for the state of Michigan said Monday it will place children in LGBT homes, reversing course following a recent legal settlement.

Grand Rapids-based Bethany Christian Services is responsible for about 8% of Michigan's more than 13,000 foster care and adoption cases involving children from troubled households.

"We are disappointed with how this settlement agreement has been implemented by the state government. Nonetheless, Bethany will continue operations in Michigan, in compliance with our legal contract requirements," the nonprofit said in a statement, confirming a policy change that was first reported by WGVU-FM.

Michigan Attorney General Dana Nessel, a Democrat, announced the settlement last month with same-sex couples who had sued in 2017. It prevents faith-based agencies from refusing to place children in LGBT households for religious reasons if it has accepted them for referral from the Michigan Department of Health and Human Services.

Lansing-based St. Vincent Catholic Charities challenged the deal in federal court last week, alleging violations of the U.S. Constitution and the federal Religious Freedom Restoration Act.

Of the faith-based agencies known to not serve LGBT couples or individuals in Michigan, Bethany does the most work for the state. The nonprofit was handling 1,159 cases as of February. Catholic Charities had 404 cases, or 3%, while St. Vincent had 80, or less than 1%.

State human services department spokesman Bob Wheaton said the agency was pleased it will "be able to continue its long-standing partnership with Bethany in providing services to children and families."

Nessel tweeted over the weekend that having more adoption agencies not discriminate results in "more children adopted into loving, nurturing 'forever' homes. Thank you to Bethany Christian Services."

As a private attorney, Nessel — who is a lesbian — successfully fought to overturn Michigan's ban on gay marriage.

On April 11, Bethany's national board of directors voted to change the policy. It applies only in Michigan, not to its operations in other states. The policy change also does not impact private adoptions, according to Bethany.

A 2015 Republican-enacted law says child-placement agencies are not required to provide any services that conflict with their sincerely held religious beliefs. But Nessel's settlement says the law does not apply if agencies are under contract with the state.

In its lawsuit , St. Vincent said it fears the state will not renew its contract in October because of the local nonprofit's religious beliefs and practices.

"If St. Vincent is unable to receive referrals from or contract with the State, it will be forced to close its foster care and adoption programs, ending a decades-old religious ministry and reducing the number of agencies available to serve families and children in need," the agency said in the complaint.

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