University of Michigan Law School
Civil Rights Litigation Clearinghouse
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Case Name United States v. Southport Bank FH-WI-0003
Docket / Court 2:13-CV-1086-JPS ( E.D. Wis. )
State/Territory Wisconsin
Case Type(s) Fair Housing/Lending/Insurance
Attorney Organization U.S. Dept. of Justice Civil Rights Division
Case Summary
On September 26, 2013, the United States of America filed a lawsuit in the Eastern District of Wisconsin against Southport Bank, under the Fair Housing Act and the Equal Credit Opportunity Act. The plaintiff, represented by the Civil Rights Division of the Department of Justice, sought a ... read more >
On September 26, 2013, the United States of America filed a lawsuit in the Eastern District of Wisconsin against Southport Bank, under the Fair Housing Act and the Equal Credit Opportunity Act. The plaintiff, represented by the Civil Rights Division of the Department of Justice, sought a declaratory judgment, injunctive relief, compensatory damages to all of the victims of the defendant's discriminatory policies, and a civil penalty, alleging that the defendant discriminated against African American and Hispanic borrowers because of race and national origin in its residential mortgage lending.

Based on statistical analyses made in 2007 and 2008, the FDIC determined that the defendant had substantial disparities in the rates given to minority versus non-Hispanic ("white") borrowers. The FDIC performed an investigation, and in 2012 referred the matter to the Department of Justice to continue the investigation since there was reason to believe that the defendant had engaged in a pattern or practice of discrimination. The data obtained from the investigation showed that in 2007 and 2008, when all other factors were accounted for, the defendant permitted its mortgage brokers to charge excessive broker fees to African American and Hispanic borrowers more frequently than white borrowers based solely on race and national origin. The defendant had a two-step process set in place where the first step determined whether the applicant satisfied objective criteria. The second step was more subjective and allowed mortgage brokers to charge fees with little checks on their discretion. The defendant did not set up objective criteria to guide the mortgage brokers in setting fees.

On October 11, 2013, the District Court (Judge Joseph Peter Stadtmueller) entered a consent order between the parties. The defendant did not admit to any pattern or practice of discrimination. The order enjoined the defendant from engaging in any act or practice that discriminates on the basis of race or national origin in any aspect of a residential real estate-related transaction in violation of the Fair Housing Act or any credit transaction in violation of the Equal Credit Opportunity Act. Among other things, the defendant's employees will have to participate in a fair lending training program and will be subject to monitoring and reporting requirements. The defendant also has to place $687,000 into a settlement fund to compensate for monetary damages that aggrieved persons may have suffered. The order terminates after three years if the defendant has complied during that time period.

Perry Miska - 03/16/2014


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Issues and Causes of Action
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Issues
Content of Injunction
Discrimination Prohibition
Monitoring
Reporting
Defendant-type
Bank or credit provider
Discrimination-area
Lending
Discrimination-basis
National origin discrimination
Race discrimination
General
Disparate Impact
Pattern or Practice
Predatory lending
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
Declaratory Judgment Act, 28 U.S.C. § 2201
Defendant(s) Southport Bank
Plaintiff Description Plaintiff is the U.S. on behalf of African American and Hispanic borrowers who were charged highers fees than non-Hispanic white borrowers because of their race and national origin.
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 Damages
Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Order Duration 2013 - 2016
Case Closing Year 2013
Case Ongoing No
Docket(s)
2:13-CV-1086-JPS (E.D. Wis.) 10/11/2013
FH-WI-0003-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Complaint 09/26/2013
FH-WI-0003-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Consent Order 10/11/2013 (E.D. Wis.)
FH-WI-0003-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Stadtmueller, Joseph Peter (E.D. Wis.)
FH-WI-0003-0002 | FH-WI-0003-9000
Monitors/Masters None on record
Plaintiff's Lawyers Holder, Eric H. Jr. (District of Columbia)
FH-WI-0003-0001
Krueger, Matthew D. (District of Columbia)
FH-WI-0003-0001 | FH-WI-0003-9000
Langworthy, Nancy Fay (District of Columbia)
FH-WI-0003-0001 | FH-WI-0003-9000
Montag, Coty R (District of Columbia)
FH-WI-0003-0001
Rosenbaum, Steven H. (District of Columbia)
FH-WI-0003-0001
Samuels, Jocelyn (District of Columbia)
FH-WI-0003-0001
Santelle, James L. (Wisconsin)
FH-WI-0003-0001
Defendant's Lawyers None on record
Other Lawyers None on record

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