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Case Name United States v. Luther Burbank Savings FH-CA-0009
Docket / Court 2:12-cv-07809-JAK-FMO ( C.D. Cal. )
State/Territory California
Case Type(s) Fair Housing/Lending/Insurance
Attorney Organization U.S. Dept. of Justice Civil Rights Division
Case Summary
On September 12, 2012, the United States filed a complaint against Luther Burbank Savings in the U.S. District Court for the Central District of California. It sought declaratory, injunctive, and monetary relief for violations of the Fair Housing Act, 42 U.S.C. §§ 3601-3691, and the Equal Credit ... read more >
On September 12, 2012, the United States filed a complaint against Luther Burbank Savings in the U.S. District Court for the Central District of California. It sought declaratory, injunctive, and monetary relief for violations of the Fair Housing Act, 42 U.S.C. §§ 3601-3691, and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691. It also sought civil penalties available under the Fair Housing Act. Settlement negotiations preceded the filing of the complaint, and the United States, represented by the Department of Justice's Civil Rights Division, filed a Proposed Consent Decree at the same time.

The complaint alleged that Luther engaged in a pattern or practice of discrimination in its residential mortgage lending activities. From 2006 to 2010, Luther maintained a minimum loan amount policy of $400,000 for its single-family residential mortgage loan program. The United States alleged that this policy had a disparate impact on African-American and Hispanic borrowers. During the period that Luther enforced this policy, it originated very few single-family residential mortgage loans in majority-minority census tracts compared to other prime lenders. It also originated very few single-family residential mortgage loans to African-American and Hispanic borrowers. The complaint alleges that Luther knew its low levels of lending to African Americans and Hispanics was attributable to the policy. The Office of Thrift Supervision referred the case to the Department of Justice after identifying fair lending issues during an examination of the bank. Luther discontinued its $400,000 minimum loan amount policy in June 2011.

Judge John A. Kronstadt entered the Consent Order on October 15, 2012. Under the agreement, Luther is prohibited from establishing a similar minimum loan amount policy in the future and must provide fair lending training for its employees. It must invest $1.1 million in a program to increase financing for mortgage loans made to qualified borrowers seeking loans in California of $400,000 or less. It also must spend $450,000 in partnerships with organizations that provide credit and financial services to minorities, $300,000 to promote its products and services to all potential customers, and $150,000 on consumer education programs. The consent decree is scheduled to last for three
years.

Benjamin Clark - 10/18/2012
Asma Husain - 02/14/2016


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Issues and Causes of Action
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Issues
Constitutional Clause
Commerce Power
Content of Injunction
Monitoring
Provide antidiscrimination training
Reporting
Defendant-type
Bank or credit provider
Discrimination-area
Lending
Discrimination-basis
National origin discrimination
Race discrimination
General
Disparate Impact
Housing
Pattern or Practice
Racial segregation
National Origin/Ethnicity
Hispanic
Plaintiff Type
U.S. Dept of Justice plaintiff
Race
Black
Causes of Action Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691
Defendant(s) Luther Burbank Savings
Plaintiff Description Department of Justice
Indexed Lawyer Organizations U.S. Dept. of Justice Civil Rights Division
Class action status sought No
Class action status granted No
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Order Duration 2012 - 2015
Case Closing Year n/a
Case Ongoing Yes
Additional Resources
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Case Studies Insurer Must Pay $100.5 Million in Redlining Case
The New York Times
Written: Oct. 27, 1998
By: Joseph B. Treaster
[ Detail ] [ External Link ]

  Nationwide Settles Virginia Redlining Suit
Property Casualty 360
Written: May. 06, 2000
By: Amanda Levin
[ Detail ] [ External Link ]

  The Origins of Fair Lending Litigation
Written: Dec. 04, 2008
By: Andrew Nash (Washington University in St. Louis)
[ Detail ] [ PDF ] [ External Link ]

Docket(s)
2:12−cv−07809 (C.D. Cal.) 10/12/2012
FH-CA-0009-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Complaint 09/12/2012
FH-CA-0009-0001.pdf | Detail
Document Source: U.S. Dep't of Justice, Civil Rights Division, Housing and Civil Enforcement
[Proposed] Agreed Order 09/12/2012 (C.D. Cal.)
FH-CA-0009-0002.pdf | Detail
Document Source: U.S. Dep't of Justice, Civil Rights Division, Housing and Civil Enforcement
[Press release] 09/12/2012
FH-CA-0009-0003.pdf | Detail
Document Source: U.S. Dep't of Justice, Civil Rights Division, Housing and Civil Enforcement
Agreed Order 10/12/2012 (C.D. Cal.)
FH-CA-0009-0004.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Kronstadt, John Arnold (C.D. Cal.)
FH-CA-0009-0004 | FH-CA-0009-9000
Olguin, Fernando Manzano (C.D. Cal.) [Magistrate]
FH-CA-0009-9000
Monitors/Masters None on record
Plaintiff's Lawyers Birotte, Andre Jr. (California)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004
Holder, Eric H. Jr. (District of Columbia)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004
Montag, Coty R (District of Columbia)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004 | FH-CA-0009-9000
Murphy, Donna M. (District of Columbia)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004
Perez, Thomas E. (District of Columbia)
FH-CA-0009-0001 | FH-CA-0009-0002
Rosenbaum, Steven H. (District of Columbia)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004
Sneed, Sekret T (California)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004 | FH-CA-0009-9000
Weidman, Leon W. (California)
FH-CA-0009-0001 | FH-CA-0009-0002 | FH-CA-0009-0004
Defendant's Lawyers None on record
Other Lawyers None on record

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