Case: United States v. City National Bank

2:23-cv-00204 | U.S. District Court for the Central District of California

Filed Date: Jan. 12, 2023

Case Ongoing

Clearinghouse coding complete

Case Summary

This is a case about unlawful redlining in Los Angeles County.  Redlining is a practice whereby lenders deny or discourage applications, or avoid providing loans and other credit services, in neighborhoods based on the race, color, or national origin of the residents of those neighborhoods. On January 12, 2023, the United States Department of Justice (DOJ) filed this lawsuit and a proposed consent order in the U.S. District Court for the Central District of California. The DOJ sued City Nationa…

This is a case about unlawful redlining in Los Angeles County.  Redlining is a practice whereby lenders deny or discourage applications, or avoid providing loans and other credit services, in neighborhoods based on the race, color, or national origin of the residents of those neighborhoods. On January 12, 2023, the United States Department of Justice (DOJ) filed this lawsuit and a proposed consent order in the U.S. District Court for the Central District of California. The DOJ sued City National Bank under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA), and sought an injunction prohibiting the Bank from continuing its discriminatory practice, a declaratory judgment stating that the defendant had violated the law, monetary damages, a civil penalty, and any other appropriate relief. The DOJ claimed that the defendant discriminated against borrowers in majority-Black and Hispanic neighborhoods by: discouraging loan applications from and making fewer loans to residents in those neighborhoods, failing to train staff and maintain adequate fair-lending policies, and failing to provide affordable loan options, in violation of the FHA and ECOA. The DOJ also claimed that the defendant intentionally engaged in a pattern or practice of discriminatory conduct, and implemented discriminatory policies with reckless disregard for the rights of individuals secured by law. The case was assigned to Judge Dolly M. Gee.

The consent order was approved by the court on January 30, 2023, (the “Effective Date”) and required City National Bank to: 1) submit a Fair Lending Status Report and Compliance Plan within 150 days of the Effective Date; 2) invest at least $29.5 million in a loan subsidy fund for residents of majority-Black and Hispanic neighborhoods in Los Angeles County; 3) invest $750,000 for the development of community partnerships to provide services that increase access to residential mortgage credit in those neighborhoods; 4) invest $500,000 for advertising and outreach in those neighborhoods; 5) invest $500,000 for consumer financial education; and 6) establish a Fair Lending Oversight Committee to monitor the Bank’s fair lending risks. 

The consent order was to remain in effect for five years, or until three months after the Bank demonstrated full compliance. The court retained jurisdiction to enforce the agreement. Starting one year after January 30, 2023, the bank was to submit annual reports to the DOJ demonstrating its progress in complying with the terms of the order, an assessment of the extent to which each obligation was met, an explanation of why the Bank fell short of meeting its goals for any particular component, and recommendations for additional actions to fulfill remaining terms. A final report was to be delivered to the DOJ at least ninety days prior to the expiration of the order.

Summary Authors

Simran Takhar (3/12/2023)

People

For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/66717318/parties/united-states-v-city-national-bank/


Judge(s)

Gee, Dolly Maizie (California)

Attorney for Plaintiff

Flagg, Kinara Ann (California)

Hikida, Katherine M (California)

Niles, Sara Lewenberg (California)

Attorney for Defendant

Montoya, Joseph Neill (California)

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Documents in the Clearinghouse

Document
1

2:23-cv-00204

Complaint and Demand for Jury Trial

Jan. 12, 2023

Jan. 12, 2023

Complaint
20

2:23-cv-00204

Consent Order

Jan. 30, 2023

Jan. 30, 2023

Order/Opinion

Docket

See docket on RECAP: https://www.courtlistener.com/docket/66717318/united-states-v-city-national-bank/

Last updated March 10, 2024, 4:04 a.m.

ECF Number Description Date Link Date / Link
1

COMPLAINT No Fee Required - US Government, filed by Plaintiff United States of America. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C) (Attorney Katherine M Hikida added to party United States of America(pty:pla))(Hikida, Katherine) (Entered: 01/12/2023)

1

View on RECAP

Jan. 12, 2023

Jan. 12, 2023

Clearinghouse
2

CIVIL COVER SHEET filed by Plaintiff United States of America. (Hikida, Katherine) (Entered: 01/12/2023)

Jan. 12, 2023

Jan. 12, 2023

PACER
3

NOTICE OF LODGING filed re Complaint (Attorney Civil Case Opening), 1 (Attachments: # 1 (proposed) Consent Order)(Hikida, Katherine) (Entered: 01/12/2023)

1

View on RECAP

Jan. 12, 2023

Jan. 12, 2023

PACER
4

AMENDED CIVIL COVER SHEET filed by Plaintiff United States of America. (Hikida, Katherine) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
5

NOTICE OF ASSIGNMENT to District Judge Dolly M. Gee and Magistrate Judge Rozella A. Oliver. (ghap) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
6

NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed. (ghap) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
7

Notice to Counsel Re Consent to Proceed Before a United States Magistrate Judge. (ghap) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
8

PROOF OF SERVICE filed by Plaintiff United States of America, re Notice of Lodging 3, Complaint (Attorney Civil Case Opening), 1 served on January 13, 2023. (Hikida, Katherine) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
9

INITIAL STANDING ORDER upon filing of the complaint by Judge Dolly M. Gee. (kti) (Entered: 01/13/2023)

Jan. 13, 2023

Jan. 13, 2023

PACER
10

NOTICE of Appearance filed by attorney Sara Lewenberg Niles on behalf of Plaintiff United States of America (Attorney Sara Lewenberg Niles added to party United States of America(pty:pla))(Niles, Sara) (Entered: 01/17/2023)

Jan. 17, 2023

Jan. 17, 2023

PACER
11

NOTICE of Appearance filed by attorney Kinara Ann Flagg on behalf of Plaintiff United States of America (Attorney Kinara Ann Flagg added to party United States of America(pty:pla))(Flagg, Kinara) (Entered: 01/17/2023)

Jan. 17, 2023

Jan. 17, 2023

PACER
12

Notice of Appearance or Withdrawal of Counsel: for attorney Daniel Prince counsel for Defendant City National Bank. Adding Daniel Prince as counsel of record for City National Bank for the reason indicated in the G-123 Notice. Filed by defendant City National Bank. (Attorney Daniel Prince added to party City National Bank(pty:dft))(Prince, Daniel) (Entered: 01/25/2023)

Jan. 25, 2023

Jan. 25, 2023

PACER
13

Notice of Appearance or Withdrawal of Counsel: for attorney Joseph Neill Montoya counsel for Defendant City National Bank. Filed by defendant City National Bank. (Attorney Joseph Neill Montoya added to party City National Bank(pty:dft))(Montoya, Joseph) (Entered: 01/25/2023)

Jan. 25, 2023

Jan. 25, 2023

PACER
14

APPLICATION of Non-Resident Attorney Jonice M. Gray Tucker to Appear Pro Hac Vice on behalf of Defendant City National Bank (Pro Hac Vice Fee - $500 Fee Paid, Receipt No. ACACDC-34680210) filed by defendant City National Bank. (Attachments: # 1 Exhibit 1 - Certificate of Good Standing Washington DC, # 2 Exhibit 2 - Certificate of Good Standing for Maryland, # 3 Proposed Order Granting Pro Hac Vice Application for Jonice Gray Tucker) (Prince, Daniel) (Entered: 01/25/2023)

Jan. 25, 2023

Jan. 25, 2023

PACER
15

APPLICATION of Non-Resident Attorney Jessica Shannon to Appear Pro Hac Vice on behalf of Defendant City National Bank (Pro Hac Vice Fee - $500 Previously Paid on 1/25/2023, Receipt No. 34680009) filed by defendant City National Bank. (Attachments: # 1 Exhibit 1 - Certificate of Good Standing Washington DC, # 2 Exhibit 2 - Certificate of Good Standing for New York, # 3 Proposed Order Granting Pro Hac Vice Application for Jessica Shannon) (Prince, Daniel) (Entered: 01/25/2023)

Jan. 25, 2023

Jan. 25, 2023

PACER
16

NOTICE of Change of Attorney Business or Contact Information: for attorney Daniel Prince counsel for Defendant City National Bank. Changing Firm Name to Paul Hastings LLP, 515 South Flower Street, Twenty-Fifth Floor, Los Angeles, CA 90071; Tel: 213-683-6000, Fax: 213-627-0705. Changing Email to danielprince@paulhastings.com. Filed by Defendant City National Bank. (Prince, Daniel) (Entered: 01/26/2023)

Jan. 26, 2023

Jan. 26, 2023

PACER
17

NOTICE of Deficiency in Electronically Filed Pro Hac Vice Application RE: APPLICATION of Non-Resident Attorney Jessica Shannon to Appear Pro Hac Vice on behalf of Defendant City National Bank (Pro Hac Vice Fee - $500 Previously Paid on 1/25/2023, Receipt No. 34680009) 15, APPLICATION of Non-Resident Attorney Jonice M. Gray Tucker to Appear Pro Hac Vice on behalf of Defendant City National Bank (Pro Hac Vice Fee - $500 Fee Paid, Receipt No. ACACDC-34680210) 14 . The following error(s) was/were found: Local Rule 5-4.3.4 Application not hand-signed. Case information is incomplete. DJ and MJ initials missing on application and proposed order. Please note DJ and MJ Notice of Assignment, dated 1/13/23, Dkt. 5. Other error(s) with document(s): Please note that electronic, image or stamp signatures are not allowed for either applicant or local counsel. See Instructions for Applicants (1). (lt) (Entered: 01/27/2023)

Jan. 27, 2023

Jan. 27, 2023

PACER
18

ORDER by Judge Dolly M. Gee: GRANTING 14 Non-Resident Attorney Jonice M. Gray Tucker APPLICATION to Appear Pro Hac Vice on behalf of Defendant, City National Bank, designating Daniel Prince as local counsel. (shb) (Entered: 01/30/2023)

Jan. 30, 2023

Jan. 30, 2023

PACER
19

ORDER by Judge Dolly M. Gee: GRANTING 15 Non-Resident Attorney Jessica M. Shannon APPLICATION to Appear Pro Hac Vice on behalf of Defendant City National Bank, designating Daniel Prince as local counsel. (shb) (Entered: 01/30/2023)

Jan. 30, 2023

Jan. 30, 2023

PACER
20

CONSENT ORDER by Judge Dolly M. Gee: The parties enter into this Consent Order to voluntarily resolve all claims arising from the conduct alleged in the Complaint. Entry of this Consent Order is in the public interest. The parties agree that the full implementation of the terms in this Consent Order will provide a resolution to the claims asserted in the Complaint in a manner consistent with City National's legitimate business interests. The date this Consent Order is entered by the Court is the "Effective Date." Within 120 days of the Effective Date, City National must conduct a detailed assessment of the Bank's fair lending program in the Los Angeles Lending Area. Within 150 days of the Effective Date, City National will submit the Fair Lending Status Report and Compliance Plan. City National will invest a minimum of $29,500,000 in a loan subsidy fund with the goal of increasing credit for home mortgage loans, home improvement loans, and home refinance loans extended in majority-Black and Hispanic neighborhoods in the Los Angeles MD. City National will partner with one or more community-based or governmental organizations that provide the residents of majority-Black and Hispanic census tracts in the Los Angeles Lending Area with services related to credit, financial education, homeownership, and foreclosure prevention. Through these partnerships, the Bank must spend a minimum of $750,000 over the term of this Consent Order on professional services to residents of majority-Black and Hispanic census tracts in the Los Angles Lending Area that increase access to residential mortgage credit. City National will spend at least $100,000 per year ($500,000 over the term of the Consent Order) on advertising and outreach in the Los Angeles Lending Area described in this Section. City National will spend a minimum of $100,000 per year ($500,000 over the term of the Order) on a consumer financial education program designed to provide information, training, and counseling services about consumer financial to residents of these areas. The parties to this Consent Order will bear their own costs and attorneys' fees. See document for further details. ( MD JS-6. Case Terminated ) (gk) (Entered: 01/31/2023)

Jan. 30, 2023

Jan. 30, 2023

RECAP

Case Details

State / Territory: California

Case Type(s):

Fair Housing/Lending/Insurance

Key Dates

Filing Date: Jan. 12, 2023

Case Ongoing: Yes

Plaintiffs

Plaintiff Description:

United States

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

City National 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

Available Documents:

Trial Court Docket

Complaint (any)

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

Content of Injunction:

Develop anti-discrimination policy

Comply with advertising/recruiting requirements

Reporting

Monitor/Master

Recordkeeping

Monitoring

Training

Amount Defendant Pays: $31.25 million

Order Duration: 2023 - None

Issues

General/Misc.:

Funding

Housing

Other Banking

Pattern or Practice

Racial profiling

Discrimination Basis:

Race discrimination

Discrimination Area:

Lending

Affected National Origin/Ethnicity(s):

Hispanic

Affected Race(s):

Black