Case: United States v. Texas Champion Bank

2:13-cv-00044 | U.S. District Court for the Southern District of Texas

Filed Date: Feb. 19, 2013

Closed Date: 2017

Clearinghouse coding complete

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 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 co…

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 consent decree terminated in 2017, and the case is now closed.

Summary Authors

Perry Miska (3/16/2014)

People


Judge(s)

Ramos, Nelva Gonzales (Texas)

Attorneys(s) for Plaintiff

Flaxman, Joel (District of Columbia)

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

Magidson, Kenneth (Texas)

Montag, Coty R (District of Columbia)

Murphy, Donna M. (District of Columbia)

Perez, Thomas E. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Warner, Eric Paxton (Texas)

Attorneys(s) for Defendant

Delionado, John (Florida)

Judge(s)

Ramos, Nelva Gonzales (Texas)

Attorneys(s) for Plaintiff

Flaxman, Joel (District of Columbia)

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

Magidson, Kenneth (Texas)

Montag, Coty R (District of Columbia)

Murphy, Donna M. (District of Columbia)

Perez, Thomas E. (District of Columbia)

Rosenbaum, Steven H. (District of Columbia)

Warner, Eric Paxton (Texas)

Attorneys(s) for Defendant

Delionado, John (Florida)

Documents in the Clearinghouse

Document

Docket [PACER]

United States v. Texas Champion Bank

March 19, 2013 Docket
1

Complaint

United States v. Texas Champion Bank

Feb. 19, 2013 Complaint
9

Consent Order [Issuing Prohibitory Injunction]

United States v. Texas Champion Bank

March 5, 2013 Order/Opinion
13

Order [Vacating Final Judgment]

United States v. Texas Champion Bank

March 19, 2013 Order/Opinion

Resources

Title Description External URL

The Origins of Fair Lending Litigation

Andrew Nash

This paper describes the origins of fair lending litigation in the 1970s. It documents two litigation strategies, one aimed at discriminatory lenders in local communities and a second at the federal … Dec. 4, 2008 http://ssrn.com/...

Docket

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

ECF Number Description Date Link
1

COMPLAINT against UNITED STATES OF AMERICA filed by UNITED STATES OF AMERICA.(Warner, Eric) (Entered: 02/19/2013)

Feb. 19, 2013
2

Proposed Summons by UNITED STATES OF AMERICA, filed.(Warner, Eric) (Entered: 02/19/2013)

Feb. 19, 2013
3

Joint MOTION for Entry of Order re: Entry of Consent Order by UNITED STATES OF AMERICA, filed. Motion Docket Date 3/12/2013. (Attachments: # 1 Proposed Order Consent Order)(Warner, Eric) (Entered: 02/19/2013)

Feb. 19, 2013

Summons Issued as to Texas Champion Bank, filed.(vrios, ) (Entered: 02/20/2013)

Feb. 20, 2013
4

ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 5/17/2013 at 09:00 AM before Judge Nelva Gonzales Ramos. Parties notified.(vrios, ) (Entered: 02/20/2013)

Feb. 20, 2013
5

NOTICE of Setting as to 3 Joint MOTION for Entry of Order re: Entry of Consent Order. Parties notified. Telephone Conference set for 3/4/2013 at 02:30 PM before Judge Nelva Gonzales Ramos, filed. (bcortez, ) (Entered: 02/27/2013)

Feb. 27, 2013
6

MOTION for John Delionado to Appear Pro Hac Vice by Texas Champion Bank, filed. Motion Docket Date 3/22/2013. (bcortez, ) (Entered: 03/01/2013)

March 1, 2013
7

ORDER granting 6 Motion to Appear Pro Hac Vice.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(sscotch, ) (Entered: 03/04/2013)

March 1, 2013
8

Joint PROPOSED ORDER Approving Consent Order re: 3 Joint MOTION for Entry of Order re: Entry of Consent Order, filed.(Warner, Eric) (Entered: 03/05/2013)

March 5, 2013
9

CONSENT ORDER (Signed by Judge Nelva Gonzales Ramos) Parties notified.(amireles, ) (Entered: 03/05/2013)

March 5, 2013
10

ORDER granting 3 Motion for Entry of Order.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(amireles, ) (Entered: 03/05/2013)

March 5, 2013
11

FINAL JUDGMENT (Signed by Judge Nelva Gonzales Ramos) Parties notified.(amireles, ) (VACATED−−PER ORDER ENTERED 3/19/13) Modified on 3/21/2013 (vrios, ). (Entered: 03/05/2013)

March 5, 2013
12

Joint MOTION to Vacate by UNITED STATES OF AMERICA, filed. Motion Docket Date 4/8/2013. (Attachments: # 1 Proposed Order)(Warner, Eric) (Entered: 03/18/2013)

March 18, 2013
13

ORDER granting 12 Motion to Vacate Final Judgment entered on 3/5/13.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(vrios, ) (Entered: 03/21/2013)

March 19, 2013

State / Territory: Texas

Case Type(s):

Fair Housing/Lending/Insurance

Key Dates

Filing Date: Feb. 19, 2013

Closing Date: 2017

Case Ongoing: No

Plaintiffs

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.

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

Texas Champion Bank, Private Entity/Person

Defendant Type(s):

Bank or credit provider

Case Details

Causes of Action:

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)

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: $700,000

Order Duration: 2013 - 2017

Content of Injunction:

Reporting

Provide antidiscrimination training

Monitoring

Discrimination Prohibition

Develop anti-discrimination policy

Issues

General:

Disparate Impact

Pattern or Practice

Predatory lending

Discrimination-area:

Lending

Discrimination-basis:

National origin discrimination

Race discrimination

National Origin/Ethnicity:

Hispanic