Case: United States v. Southport Bank

2:13-cv-01086 | U.S. District Court for the Eastern District of Wisconsin

Filed Date: Sept. 26, 2013

Closed Date: 2016

Clearinghouse coding complete

Case Summary

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 Am…

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)

People

For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/4412983/parties/united-states-v-southport-bank/


Judge(s)

Stadtmueller, Joseph Peter (Wisconsin)

Attorneys(s) for Plaintiff

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

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)

Santelle, James L. (Wisconsin)

Attorneys(s) for Defendant

Delionado, John (Florida)

Judge(s)

Stadtmueller, Joseph Peter (Wisconsin)

Attorneys(s) for Plaintiff

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

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)

Santelle, James L. (Wisconsin)

Attorneys(s) for Defendant

Delionado, John (Florida)

Documents in the Clearinghouse

Document

Docket [PACER]

United States v. Southport Bank

Oct. 11, 2013 Docket
1

Complaint

Sept. 26, 2013 Complaint
3

Consent Order

Oct. 11, 2013 Order/Opinion

Docket

See docket on RECAP: https://www.courtlistener.com/docket/4412983/united-states-v-southport-bank/

Last updated May 12, 2022

ECF Number Description Date Link
1

COMPLAINT against Southport Bank by United States of America. (Attachments: # 1 Civil Cover Sheet)(Krueger, Matthew)

1 Civil Cover Sheet

View on PACER

Sept. 26, 2013 PACER
2

MOTION to File Proposed Consent Order by United States of America. (Attachments: # 1 Proposed Consent Order)(Krueger, Matthew)

1 Proposed Consent Order

View on PACER

Sept. 26, 2013 PACER
3

CONSENT ORDER signed by Judge J P Stadtmueller on 10/11/13 resolving the claims of the United States that Southport Bank has engaged in a pattern or practice of lending discrimination in violation of the Fair Housing Act and the Equal Credit Opportunity Act. See Order. (cc: John Delionado for Southport Bank, all counsel)(nm)

Oct. 11, 2013 RECAP

State / Territory: Wisconsin

Case Type(s):

Fair Housing/Lending/Insurance

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):

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

Declaratory Judgment Act, 28 U.S.C. § 2201

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

Damages

Source of Relief:

Settlement

Form of Settlement:

Court Approved Settlement or Consent Decree

Amount Defendant Pays: $687,000

Order Duration: 2013 - 2016

Content of Injunction:

Discrimination Prohibition

Reporting

Monitoring

Issues

General:

Disparate Impact

Pattern or Practice

Predatory lending

Discrimination-area:

Lending

Discrimination-basis:

National origin discrimination

Race discrimination

Race:

Black

National Origin/Ethnicity:

Hispanic