Filed Date: Sept. 12, 2012
Closed Date: 2015
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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)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/4149046/parties/united-states-v-luther-burbank-savings/
Kronstadt, John Arnold (California)
Birotte, Andre Jr. (California)
Holder, Eric H. Jr. (District of Columbia)
Montag, Coty R (District of Columbia)
Murphy, Donna M. (District of Columbia)
Kronstadt, John Arnold (California)
Olguin, Fernando Manzano (California)
See docket on RECAP: https://www.courtlistener.com/docket/4149046/united-states-v-luther-burbank-savings/
Last updated March 27, 2024, 3:25 a.m.
State / Territory: California
Case Type(s):
Fair Housing/Lending/Insurance
Special Collection(s):
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):
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):
Available Documents:
Injunctive (or Injunctive-like) Relief
Outcome
Prevailing Party: Plaintiff
Nature of Relief:
Injunction / Injunctive-like Settlement
Source of Relief:
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
Provide antidiscrimination training
Issues
General:
Discrimination-area:
Discrimination-basis:
National origin discrimination
Race:
National Origin/Ethnicity: