Resource: The Origins of Fair Lending Litigation

This paper describes the origins of fair lending litigation in the 1970s. It documents two litigation strategies, one aimed at discriminatory lenders in local communities and a second at the federal lending regulators. Together, these two litigation strategies helped to establish the basic anti-lending discrimination framework that remains in place today. Rather than view these two strategies as distinct, however, this paper argues that they represented complementary efforts to establish an effective anti-discrimination strategy at local and national levels.

Part I provides a brief background on lending discrimination and early efforts to combat it. Part II describes the emergence of fair lending damages lawsuits in the 1970s; Laufman v. Oakley Building and Loan Company, the case that established that the Fair Housing Act prohibits redlining, receives extensive treatment. In Part III, the paper provides a detailed litigation case study of National Urban League v. Comptroller of the Currency, the class action lawsuit filed in 1976 against the four federal bank regulatory agencies that sought to compel federal action to eliminate racial discrimination in lending. This case study is based upon the litigation files of lead plaintiffs’ attorney William L. Taylor, which are stored at the Library of Congress, as well as upon interviews with several key litigation participants. Part IV concludes.