CICERO, Ill. (CBS) — The Town of Cicero has agreed to settle a lawsuit brought by a transgender woman who claims she was humiliated, harassed and threatened with arrest for “fraud” by police officers.

The lawsuit by Bianca Feliciano was settled Tuesday for $10,000. The Town of Cicero will also adopt a policy for dealing with transgender people – a policy that even the City of Chicago does not yet have in place.

In the lawsuit, Feliciano told police officers she was illegally stopped and searched last year as she and another transgender person walked down a street in Cicero. The officers accused them of being prostitutes, the lawsuit said, as quoted by the Chicago Tribune.

Feliciano then presented a government-issued Illinois state ID, which listed her as female, and one of the officers threatened to arrest her with fraud for it, said the lawsuit as quoted by the Tribune.

One of the officers allegedly told Feliciano: “You are not female. You have (male genitals) between your legs,” according to a Chicago Phoenix report.

She says police also made crude remarks and said she wouldn’t be “the way she is” if she was properly disciplined.

Feliciano told the Tribune she was 14 when she decided to transition from male to female, and she was 17 when the incident last year happened, the Tribune reported.

The Town of Cicero is not admitting any wrongdoing, but decided to settle the case rather than going ahead with a long court fight, the Tribune reported. A new policy on dealing with transgender people should help stop any such confrontations in the future, town spokesman Ray Hanania told the Tribune.

As it stands now, New York and Los Angeles both have policies on dealing with transgender people for their officers. Chicago does not, although Ald. Proco “Joe” Moreno (1st) has proposed an ordinance that would change that, and that would create a commission on transgender issues in the Chicago Police Department.