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Case Name United States v. Texas Champion Bank FH-TX-0010
Docket / Court 2:13-cv-00044 ( S.D. Tex. )
State/Territory Texas
Case Type(s) Fair Housing/Lending/Insurance
Attorney Organization U.S. Dept. of Justice Civil Rights Division
Case Summary
On February 19, 2013, the United States of America filed a lawsuit in the Southern District of Texas against Texas Champion Bank, under the Equal Credit Opportunity Act ("ECOA"). The plaintiff, represented by the U.S. Attorney's Office, sought a declaratory judgment, injunctive relief, and ... read more >
On February 19, 2013, the United States of America filed a lawsuit in the Southern District of Texas against Texas Champion Bank, under the Equal Credit Opportunity Act ("ECOA"). The plaintiff, represented by the U.S. Attorney's Office, sought a declaratory judgment, injunctive relief, and compensatory damages to all of the victims of the defendant's discriminatory policies, alleging that the defendant discriminated against Hispanic borrowers because of race and national origin on unsecured consumer loans.

In March 2010, the FDIC performed an investigation to determine whether the defendant was complying with the ECOA. Once it had reason to believe that the defendant had engaged in a pattern or practice of discrimination, the FDIC referred the matter to the Department of Justice. Based on data from 2006 to 2010, the DOJ found that on average, and with all other factors accounted for, the defendant charged higher interest rates on unsecured loans to Hispanic borrowers than to non-Hispanic borrowers. The significant statistical disparity between the interest rates charged to Hispanic borrowers and non-Hispanic borrowers were a result of the broad discretion the defendant gave to its loan officers and negatively impacted Hispanic borrowers.

On March 5, 2013, the District Court (Judge Nelva Gonzales Ramos) 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 credit transaction in violation of the Equal Credit Opportunity Act. Among other things, the defendant's employees will have to participate in a training program and will be subject to monitoring and reporting requirements. Unique to this case, the defendant has to set up a Complaint Resolution Program for consumers. The defendant also has to place $700,000 into a settlement fund to compensate for monetary damages that aggrieved persons may have suffered. The order terminates after four 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
Develop anti-discrimination policy
Discrimination Prohibition
Monitoring
Provide antidiscrimination training
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
Causes of Action Declaratory Judgment Act, 28 U.S.C. § 2201
Equal Credit Opportunity Act (ECOA), 15 U.S.C. ยง 1691
Defendant(s) Texas Champion Bank
Plaintiff Description Plaintiff is the U.S. on behalf of Hispanic borrowers who were charged higher interest rates on unsecured consumer loans compared to the rates charged to similarly situated white borrowers due to their national origin.
Indexed Lawyer Organizations U.S. Dept. of Justice Civil Rights Division
Class action status sought No
Class action status granted Moot
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 - 2017
Case Closing Year 2013
Case Ongoing No
Docket(s)
2:13−cv−00044 (S.D. Tex.) 03/19/2013
FH-TX-0010-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Complaint 02/19/2013
FH-TX-0010-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Consent Order [Issuing Prohibitory Injunction] 03/05/2013 (S.D. Tex.)
FH-TX-0010-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order [Vacating Final Judgment] 03/19/2013 (S.D. Tex.)
FH-TX-0010-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Ramos, Nelva Gonzales (S.D. Tex.)
FH-TX-0010-0002 | FH-TX-0010-0003 | FH-TX-0010-9000
Monitors/Masters None on record
Plaintiff's Lawyers Flaxman, Joel (District of Columbia)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003
Holder, Eric H. Jr. (District of Columbia)
FH-TX-0010-0001
Magidson, Kenneth (Texas)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003
Montag, Coty R (District of Columbia)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003
Murphy, Donna M. (District of Columbia)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003
Perez, Thomas E. (District of Columbia)
FH-TX-0010-0001 | FH-TX-0010-0002
Rosenbaum, Steven H. (District of Columbia)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003
Warner, Eric Paxton (Texas)
FH-TX-0010-0001 | FH-TX-0010-0002 | FH-TX-0010-0003 | FH-TX-0010-9000
Defendant's Lawyers Delionado, John (Florida)
FH-TX-0010-0002 | FH-TX-0010-0003 | FH-TX-0010-9000
Other Lawyers None on record

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