On July 13, 2004, the Department of Justice filed suit in the U.S. District Court for the Northern District of Illinois against First American Bank under the Fair Housing Act, 42 U.S.C. 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. 1691. The DOJ alleged that the bank engaged in a ...
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On July 13, 2004, the Department of Justice filed suit in the U.S. District Court for the Northern District of Illinois against First American Bank under the Fair Housing Act, 42 U.S.C. 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. 1691. The DOJ alleged that the bank engaged in a practice called redlining by unlawfully failing to market and provide its lending products and services on an equal basis to minority neighborhoods in Chicago and Kankakee, Illinois. The DOJ specifically alleged that First American Bank intentionally failed to serve heavily African-American and Hispanic communities.
The parties entered a settlement agreement that was approved by the court (Judge Der−Yeghiayan) on July 16, 2004. Under the settlement agreement terms, First American Bank is enjoined from engaging in any practice which discriminates on the basis of race, color, or national origin in any aspect of a residential real estate-related or credit transaction.
First American Bank agreed to open four new branch offices in minority communities within a three year-term. First American Bank will also invest $5 million in a special financing program for home mortgage lending, $400,000 in marketing and outreach, and $300,000 in consumer education and financial literacy programs.
The order is designed to last five years. However, both parties agreed that if the Defendant-lender fulfilled all requirements of the order within four years, it has the option to terminate the order.
On February 13, 2009 both parties filed an agreement to terminate the consent order, which was agreed to by the court (Judge Der−Yeghiayan) on February 19, 2009.
Similar cases brought forth by the Department of Justice against lenders due to allegations of redlining include United States v. Centier Bank
, United States v. Citizens Republic Bancorp, Inc.
, and United States v. Old Kent Financial Corporation
. Megan Richardson - 04/03/2014