On September 5, 1996, the U.S. Department of Justice filed a lawsuit under 42 U.S.C. §§ 3601-3619 (Fair Housing Act) and 15 U.S.C. § 1691 (Equal Credit Opportunity Act) against the Long Beach Mortgage Company in the United States District Court for the Central District of California. The Department of Justice sought declaratory and injunctive relief and monetary damages on behalf of African-Americans, Latinos, women, and persons over 55 who had allegedly been victims of the defendant's discriminatory policies. Specifically, the DOJ alleged that Long Beach, a sub-prime mortgage lender, had failed properly instructed its employees regarding their obligation to treat prospective customers without regard to race, national origin, gender or age in compliance with fair lending laws. The DOJ further alleged that the company used a number of discriminatory practices and tactics that resulted in a pattern of higher fees and costs for loan applicants of minority groups.

Contemporaneously with filing the complaint, the parties submitted a proposed Settlement Agreement to the Court for approval. The Agreement established objective guidelines for establishing the risk of future mortgage applicants, and set up a training program for Long Beach employees. The Agreement also created a monitoring program to help Long Beach ensure that no further pattern of discrimination would emerge in its practice, and established a record keeping and reporting program that included semi-annual reports to the DOJ. Long Beach further agreed to establish a fund of $3 million to reimburse its borrowers previously given unfair terms, and to donate $1 million to consumer education programs. The District Court (Judge Dickran Tevrizian) approved the Settlement Agreement on September 5, 1996.

The agreement ended in 1999 without any further litigation. The case is now closed.

Nick Niles - 07/12/2007


compress summary