On September 30th, 2009, the United States Department of Justice filed a lawsuit in the U.S. District Court Southern District of Alabama (Mobile) under the Fair Housing Act and the Equal Credit Opportunity Act against First United Security Bank. The plaintiff, represented by attorneys from the U. S. Attorney's Office and the Department of Justice, claimed that the Bank engaged in a pattern or practice of home-mortgage lending discrimination against black applicants. They asked the Court to declare that the Bank's practices violated the Fair Housing Act and the Equal Credit Opportunity Act, to enjoin the Bank from continuing the discriminatory practice, to award monetary damages to all victims of the Bank's allegedly discriminatory practices, and to asses a civil penalty against the Bank.

Specifically, the U.S. claimed that the Federal Deposit Insurance Corporation (FDIC) had reason to believe that in 2004 the Bank discriminated against black applicants, on the basis of race, in setting higher interest rates for first-lien refinance loans for owner-occupied one-to-four family houses, and by failing to meet the lending needs of majority African-American tracts in west central Alabama on an equal basis with majority white tracts.

The case was assigned to Chief Judge William H. Steele; on November 18th, 2009, he entered the Agreed Order for Resolution. This Agreement stated that the Bank had implemented and will continue to implement policies and procedures to ensure that the pricing of its residential loan is done in a nondiscriminatory manner. The Bank will also compensate certain African-American borrowers. The Bank shall ensure that it provides all people, regardless of the majority race or color of the area, with the opportunity to apply for and obtain credit. This will be accomplished by using a standard pricing matrix that cannot be varied from except in special circumstances, the bank shall make all reasonable effort to open branches in the majority African-American areas that it serves, the bank shall reach out and advertise on black-oriented radio and print medium, asses the credit needs of consumers in majority black areas, and engage in consumer education.

The Agreement requires annual reports by the bank, for at least four years after its entry. It ends fifty-two and a half months after the filing of the fourth of those reports, unless the Department of Justice deems that the Bank has not followed the terms of the Agreement. Thus the agreement will remain in force until at least 2014. The Court retains jurisdiction for the duration of the agreement.

Megan Dolan - 05/28/2014


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