Filed Date: Sept. 26, 2013
Closed Date: 2016
Clearinghouse coding complete
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 would participate in a fair lending training program and would be subject to monitoring and reporting requirements. The defendant also agreed to place $687,000 into a settlement fund to compensate for monetary damages that aggrieved persons may have suffered.
After dispersing damages to eligible recipients who responded to notice, more than $200,000 remained in the settlement fund. On February 5, 2016, the court ordered the remaining money to be disbersed to the organizations proposed by the parties: Housing Resources, The Urban League of Racine and Kenosha, NeighborhoodWorks Badgerland, and Habitat for Humanity of Kenosha. The case is now closed.
Summary Authors
Perry Miska (3/16/2014)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/4412983/parties/united-states-v-southport-bank/
Armijo, Rumaldo R (Wisconsin)
Clayton, Lindsay Laurie (Wisconsin)
Eichenholtz, Seth D. (Wisconsin)
Harrington, Quinn Patrick (Wisconsin)
Delionado, John (Florida)
Stadtmueller, Joseph Peter (Wisconsin)
Clayton, Lindsay Laurie (Wisconsin)
Eichenholtz, Seth D. (Wisconsin)
Harrington, Quinn Patrick (Wisconsin)
Hendry, Melanie Dyani (Wisconsin)
Holder, Eric H. Jr. (District of Columbia)
Johnson, Kristin Berger (Wisconsin)
Krueger, Matthew D. (District of Columbia)
Langworthy, Nancy Fay (District of Columbia)
Montag, Coty R (District of Columbia)
Rosenbaum, Steven H. (District of Columbia)
Samuels, Jocelyn (District of Columbia)
See docket on RECAP: https://www.courtlistener.com/docket/4412983/united-states-v-southport-bank/
Last updated March 2, 2024, 3:11 a.m.
State / Territory: Wisconsin
Case Type(s):
Fair Housing/Lending/Insurance
Special Collection(s):
Key Dates
Filing Date: Sept. 26, 2013
Closing Date: 2016
Case Ongoing: No
Plaintiffs
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.
Plaintiff Type(s):
U.S. Dept of Justice plaintiff
Attorney Organizations:
U.S. Dept. of Justice Civil Rights Division
Public Interest Lawyer: Yes
Filed Pro Se: No
Class Action Sought: No
Class Action Outcome: Not sought
Defendants
Southport Bank, Private Entity/Person
Defendant Type(s):
Case Details
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
Available Documents:
Injunctive (or Injunctive-like) Relief
Outcome
Prevailing Party: Plaintiff
Nature of Relief:
Injunction / Injunctive-like Settlement
Source of Relief:
Form of Settlement:
Court Approved Settlement or Consent Decree
Amount Defendant Pays: $687,000
Order Duration: 2013 - 2016
Content of Injunction:
Issues
General:
Discrimination-area:
Discrimination-basis:
National origin discrimination
Race:
National Origin/Ethnicity: