Case: United States v. Luther Burbank Savings

2:12-cv-07809 | U.S. District Court for the Central District of California

Filed Date: Sept. 12, 2012

Closed Date: 2015

Clearinghouse coding complete

Case Summary

On September 12, 2012, the United States filed a complaint against Luther Burbank Savings in the U.S. District Court for the Central District of California. The U.S. sought declaratory, injunctive, and monetary relief for violations of the Fair Housing Act and the Equal Credit Opportunity Act (ECOA). The U.S. also sought civil penalties available under the Fair Housing Act. Settlement negotiations preceded the filing of the complaint, and the U.S., represented by the Department of Justice's Civ…

On September 12, 2012, the United States filed a complaint against Luther Burbank Savings in the U.S. District Court for the Central District of California. The U.S. sought declaratory, injunctive, and monetary relief for violations of the Fair Housing Act and the Equal Credit Opportunity Act (ECOA). The U.S. also sought civil penalties available under the Fair Housing Act. Settlement negotiations preceded the filing of the complaint, and the U.S., represented by the Department of Justice's Civil Rights Division, filed a Proposed Consent Decree at the same time.

The complaint alleged that the defendant engaged in a pattern or practice of discrimination in its residential mortgage lending activities. From 2006 to 2010, Luther maintained a minimum loan amount policy of $400,000 for its single-family residential mortgage loan program. The U.S. alleged that this policy had a disparate impact on African-American and Hispanic borrowers. The period that Luther enforced this policy resulted in very few single-family residential mortgage loans in majority-minority census tracts compared to other prime lenders. Very few single-family residential mortgage loans to African-American and Hispanic borrowers also arose under the policy. The complaint alleged that Luther knew that low levels of lending to African Americans and Hispanics resulted from the policy. The Office of Thrift Supervision referred the case to the Department of Justice after identifying fair lending issues during an examination of the bank. Luther discontinued its $400,000 minimum loan amount policy in June 2011.

Judge John A. Kronstadt entered the Consent Order on October 12, 2012. Under the agreement, Luther was prohibited from establishing a similar minimum loan amount policy in the future and must provide fair lending training for its employees. The defendant was required to invest $1.1 million in a program to increase financing for mortgage loans made to qualified borrowers seeking loans in California of $400,000 or less. The order also required Luther to spend $450,000 in partnerships with organizations that provided credit and financial services to minorities, $300,000 to promote its products and services to all potential customers, and $150,000 on consumer education programs. The consent decree order called for three years of enforcing the agreed upon terms. The case is now closed.

Summary Authors

Benjamin Clark (10/18/2012)

Asma Husain (2/14/2016)

Richa Bijlani (11/19/2019)

People

For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/4149046/parties/united-states-v-luther-burbank-savings/


Judge(s)

Kronstadt, John Arnold (California)

Olguin, Fernando Manzano (California)

Attorneys(s) for Plaintiff

Birotte, Andre Jr. (California)

Holder, Eric H. Jr. (District of Columbia)

Montag, Coty R (District of Columbia)

Murphy, Donna M. (District of Columbia)

Perez, Thomas E. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Sneed, Sekret T (California)

Weidman, Leon W. (California)

Judge(s)

Kronstadt, John Arnold (California)

Olguin, Fernando Manzano (California)

Attorneys(s) for Plaintiff

Birotte, Andre Jr. (California)

Holder, Eric H. Jr. (District of Columbia)

Montag, Coty R (District of Columbia)

Murphy, Donna M. (District of Columbia)

Perez, Thomas E. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Sneed, Sekret T (California)

Weidman, Leon W. (California)

Documents in the Clearinghouse

Document

Docket

United States of America v. Luther Burbank Savings

Oct. 12, 2012 Docket

[Press release]

United States of America v. Luther Burbank Savings

No Court

Sept. 12, 2012 Press Release
1

Complaint

Sept. 12, 2012 Complaint
3-1

[Proposed] Agreed Order

United States of America v. Luther Burbank Savings

Sept. 12, 2012 Order/Opinion
6

Agreed Order

United States of America v. Luther Burbank Savings

Oct. 12, 2012 Order/Opinion

Docket

See docket on RECAP: https://www.courtlistener.com/docket/4149046/united-states-v-luther-burbank-savings/

Last updated May 12, 2022, 8 p.m.

ECF Number Description Date Link
1

COMPLAINT against Defendant Luther Burbank Savings. Case assigned to Judge John A Kronstadt for all further proceedings. Discovery referred to Magistrate Judge Fernando M. Olguin.(Filing fee $ 350: NO FEE REQUIRED), filed by plaintiff United States of America.(ghap) (mg). (Entered: 09/17/2012)

Sept. 12, 2012 RECAP
2

NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed.(ghap) (Entered: 09/17/2012)

Sept. 12, 2012 PACER
3

[DOCUMENT STRICKEN PURSUANT TO ORDER G-106 DATED 10/4/2012] - [Proposed] Agreed Order filed by Plaintiff United States of America re: Complaint - (Discovery), Complaint - (Discovery) 1 (Attachments: # 1 [Proposed] Agreed Order)(Sneed, Sekret) Modified on 10/4/2012 (shb). (Entered: 10/03/2012)

1 [Proposed] Agreed Order

View on PACER

Oct. 3, 2012 PACER
4

ORDER by Judge John A Kronstadt: the following document(s) be STRICKEN for failure to comply with the Local Rules, General Order and/or the Courts Case Management Order: Miscellaneous Document 3, for the following reasons: Proposed orders are to be lodged with the Court. Counsel shall file a "Notice of Lodging of Proposed Order Re..." with the proposed order e-filed as an attachment to the Notice.; (shb) (Entered: 10/04/2012)

Oct. 4, 2012 PACER
5

NOTICE OF LODGING filed Resolution of Action re Complaint - (Discovery), Complaint - (Discovery) 1 (Attachments: # 1 [Proposed] Agreed Order)(Sneed, Sekret) (Entered: 10/04/2012)

1 [Proposed] Agreed Order

View on PACER

Oct. 4, 2012 PACER
6

AGREED ORDER by Judge John A Kronstadt, re Notice of Lodging 5 (shb) (Entered: 10/15/2012)

Oct. 12, 2012 PACER

State / Territory: California

Case Type(s):

Fair Housing/Lending/Insurance

Key Dates

Filing Date: Sept. 12, 2012

Closing Date: 2015

Case Ongoing: No

Plaintiffs

Plaintiff Description:

Department of Justice

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

Luther Burbank Savings, Private Entity/Person

Defendant Type(s):

Bank or credit provider

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

Constitutional Clause(s):

Commerce Power

Availably Documents:

Trial Court Docket

Complaint (any)

Monetary Relief

Injunctive (or Injunctive-like) Relief

Outcome

Prevailing Party: Plaintiff

Nature of Relief:

Injunction / Injunctive-like Settlement

Source of Relief:

Settlement

Form of Settlement:

Court Approved Settlement or Consent Decree

Amount Defendant Pays: $2,000,000

Order Duration: 2012 - 2015

Content of Injunction:

Develop anti-discrimination policy

Monitoring

Provide antidiscrimination training

Reporting

Training

Issues

General:

Disparate Impact

Housing

Pattern or Practice

Racial segregation

Discrimination-area:

Lending

Discrimination-basis:

National origin discrimination

Race discrimination

Race:

Black

National Origin/Ethnicity:

Hispanic