Fair Lending Developments: Standing to Sue Takes the Floor

Fair Lending Developments: Standing to Sue Takes the Floor By John L. Ropiequet, Christopher S. Naveja, and L. Jean Noonan* INTRODUCTION The past year once again saw the U.S. Supreme Court grant certiorari on an important fair lending question: whether municipal plaintiffs have standing to bring disparate impact claims in suits under the Fair Housing Act ( FHA ). 1 This action has caused all of the municipal cases that were being actively litigated to be stayed pending a decision from the Supreme Court, except for two pending appeals in the U.S. Court of Appeals for the Ninth Circuit. 2 Federal enforcement actions alleging racial and national origin discrimination continued to be brought by the U.S. Department of Justice ( DOJ ) and the Consumer Financial Protection Bureau ( CFPB ) during the past year, although only two of them, against auto finance companies, featured disparate impact claims. 3 The U.S. Department of Housing and Urban Development ( HUD ) also continued to bring cases based on the same grounds and on other types of discrimination. * John L. Ropiequet is counsel to Arnstein & Lehr LLP at its Chicago office. He is co-editor of the Annual Survey. Christopher S. Naveja is a partner in Arnstein & Lehr at its Chicago office. L. Jean Noonan is a partner in Hudson Cook LLP, where she manages the firm s Washington, D.C. office. 1. Pub. L. No. 90-284, tit. VIII IX, 82 Stat. 73, 81 90 (1968) (codified as amended at 42 U.S.C. 3601 3631 (2012)); see infra notes 34 36 and accompanying text. 2. See, e.g., City of Miami Gardens v. Wells Fargo & Co., No. 1:14-cv-22203-FAM (S.D. Fla. June 30, 2016) (order). Two decisions that granted summary judgment to the defendant banks that were discussed in the previous Survey are on appeal and awaiting decision as of this writing. See City of Los Angeles v. Wells Fargo & Co., No. 2:13-cv-09007-ODW (RZx), 2015 WL 4398858 (C.D. Cal. July 17, 2015), appeal docketed, No. 15-56157 (9th Cir. July 29, 2015); City of Los Angeles v. Bank of Am. Corp., No. 2:13-cv-9046-PA (AGRx), 2015 WL 4880511 (C.D. Cal. May 11, 2015), appeal docketed, No. 15-55897 (9th Cir. June 10, 2015); see also John L. Ropiequet, Christopher S. Naveja & L. Jean Noonan, Fair Lending Developments: Whither Disparate Impact?, 71 BUS. LAW. 701, 709 11 (2016) [hereinafter Fair Lending 2016] (in the 2016 Annual Survey). 3. See Kevin M. McDonald & Kenneth J. Rojc, Accelerating Regulation of Automotive Finance, 72 BUS. LAW. 559 (2017) (in this Annual Survey). 549

550 The Business Lawyer; Vol. 72, Spring 2017 FAIR LENDING LITIGATION As noted in previous Surveys, 4 the U.S. Supreme Court s 2011 decision in Wal-Mart Stores, Inc. v. Dukes 5 effectively eliminated private class actions against mortgage lenders based on alleged violations of the FHA and the Equal Credit Opportunity Act ( ECOA ). 6 Since then, most fair lending litigation, outside of the realm of enforcement actions, has been prosecuted by municipal plaintiffs, either cities or counties, that sued for injuries that they allegedly suffered due to foreclosures of their residents property caused by allegedly discriminatory mortgage lending practices. 7 After three metropolitan Atlanta counties filed a fair lending complaint against a mortgage lender in 2012, 8 acasewhichisstill pending as of this writing, similar cases were filed by the City of Los Angeles, 9 the City of Miami, 10 and Cook County, Illinois. 11 As chronicled in previous Surveys, 12 these complaints were often challenged on the ground that the municipal plaintiffs lacked standing to sue. Thus, the ruling in the Atlanta case that the three plaintiff counties suffered an injury in fact cognizable under the FHA that was caused by the defendant bank s allegedly discriminatory mortgage lending practices, so that the plaintiff counties had Article III 4. See John L. Ropiequet, Christopher S. Naveja & L. Jean Noonan, Fair Lending Developments: Is Disparate Impact Here to Stay?, 69BUS. LAW. 609, 610 11 (2014) (in the 2014 Annual Survey); John L. Ropiequet, Christopher S. Naveja & L. Jean Noonan, Fair Lending Developments: Enforcement Intensifies, Class Actions Diminish, 68 BUS. LAW. 637, 643 47 (2013) (in the 2013 Annual Survey). 5. 564 U.S. 338 (2011). 6. Pub. L. No. 93-495, tit. V, 88 Stat. 1500, 1521 25 (1974) (codified as amended at 15 U.S.C. 1691 1691f (2012)). 7. See Fair Lending 2016, supra note 2, at 709 12; John L. Ropiequet, Christopher S. Naveja & L. Jean Noonan, Fair Lending Developments: A Continuation and a New Beginning, 70 BUS. LAW. 625, 631 36 (2015) [hereinafter Fair Lending 2015] (in the 2015 Annual Survey). 8. See Complaint, DeKalb Cty. v. HSBC N. Am. Holdings, Inc., No. 1:12-cv-3640-SCJ (N.D. Ga. Oct. 18, 2012). 9. See Complaint, City of Los Angeles v. JP Morgan Chase & Co., No. 2:14-cv-4168-ODW (RZx) (C.D. Cal. May 30, 2014); Complaint, City of Los Angeles v. Bank of Am. Corp., No. 2:13-cv-9046-PA (AGRx) (C.D. Cal. Dec. 6, 2013); Complaint, City of Los Angeles v. Citigroup Inc., No. 2:13-cv-9009- SVW (JCx) (C.D. Cal. Dec. 5, 2013); Complaint, City of Los Angeles v. Wells Fargo & Co., No. 2:13-cv- 9007-ODW (RZx) (C.D. Cal. Dec. 5, 2013). 10. See Complaint, City of Miami v. JP Morgan Chase & Co., No. 1:14-cv-22205-UU (S.D. Fla. June 13, 2014); Complaint, City of Miami v. Citigroup Inc., No. 1:13-cv-24510-CMA (S.D. Fla. Dec. 13, 2013); Complaint, City of Miami v. Wells Fargo & Co., No. 1:13-cv-24508-WPD (S.D. Fla. Dec. 13, 2013); Complaint, City of Miami v. Bank of Am. Corp., No. 1:13-cv-24506-WPD (S.D. Fla. Dec. 13, 2013). The same attorneys filed cases against the same defendants for the City of Miami Gardens, Florida, but those were stayed pending determination of the appeals in the City of Miami cases. See, e.g., City of Miami Gardens v. Bank of Am. Corp., No. 1:14-cv-22202-KMW (S.D. Fla. Nov. 18, 2014) (order). Although the City of Miami Gardens cases resumed after the Eleventh Circuit s decisions, they were again stayed when the U.S. Supreme Court granted certiorari. See, e.g., City of Miami Gardens v. Bank of Am. Corp., No. 1:14-cv-22202-KMW (S.D. Fla. July 13, 2016) (order). 11. See Complaint, Cook Cty. v. Wells Fargo & Co., No. 1:14-cv-9548 (N.D. Ill. Nov. 28, 2014); Complaint, Cook Cty. v. Bank of Am. Corp., No. 1:14-cv-2280 (N.D. Ill. Mar. 31, 2014); Complaint, Cook Cty. v. HSBC N. Am. Holdings, Inc., No. 1:14-cv-2031 (N.D. Ill. Mar. 21, 2014). 12. See Fair Lending 2016, supra note 2, at 709 12; Fair Lending 2015, supra note 7, at 631 36.

Fair Lending Developments 551 standing, 13 was followed by several other decisions that either agreed with that conclusion or disagreed with it. In the Los Angeles cases, the courts found that the city not only had Article III standing, but that the city fell within the zone of interests protected by the FHA and, therefore, had statutory standing as well. 14 In the Miami cases, on the other hand, the court concluded that the city was outside the zone of interests protected by the FHA, so that it lacked statutory standing. 15 Those decisions also found that the city failed to adequately allege that the lenders discriminatory practices had a causal connection to the claimed injury. 16 In the Cook County cases, two courts concluded that the county had Article III standing and, to the extent that statutory standing under the FHA was not co-extensive with Article III standing, the county also fell within the protected zone. 17 In the third case, the court found that there was Article III standing, but not statutory standing. 18 The dismissals of three of the Miami cases were appealed to the U.S. Court of Appeals for the Eleventh Circuit, while a fourth case was stayed pending a decision on those appeals. 19 The Eleventh Circuit reversed the dismissals, with a lead opinion in City of Miami v. Bank of America Corp., 20 which it followed in the other two decisions. 21 Because the district court had not ruled on the Article III standing question, but the issue was raised on appeal, the Eleventh Circuit addressed the constitutional standing question first. The court had little difficulty in finding, based on controlling Supreme Court case law, that the City has said enough to allege an injury in fact for constitutional standing purposes through its allegations that it was damaged by reduced property tax revenues that resulted from foreclosures that occurred because of the alleged targeting of black and Latino borrowers for predatory loans that resulted in foreclosures. 22 13. See DeKalb Cty. v. HSBC N. Am. Holdings, Inc., No. 1:12-cv-3640-SCJ, 2013 U.S. Dist. LEXIS 185976, at *10 16 (N.D. Ga. Sept. 25, 2013). 14. See, e.g., City of Los Angeles v. Wells Fargo & Co., 22 F. Supp. 3d 1047, 1053 58 (C.D. Cal. 2014); see also Fair Lending 2015, supra note 7, at 633 34 (discussing the City of Los Angeles cases). 15. See, e.g., City of Miami v. Bank of Am. Corp., No. 1:13-cv-24506-WPD, 2014 U.S. Dist. LEXIS 95445, at *9 15 (S.D. Fla. July 9, 2014), rev d, 800 F.3d 1262 (11th Cir. 2015), cert. granted, 136 S. Ct. 2544 (2016) (No. 15-1111). 16. See, e.g., id. at *15 18. 17. See Cook Cty. v. HSBC N. Am. Holdings, Inc., 136 F. Supp. 3d 952, 959 64 (N.D. Ill. 2015); Cook Cty. v. Bank of Am. Corp., No. 1:14-cv-2280, 2015 U.S. Dist. LEXIS 34468, at *7 13 (N.D. Ill. Mar. 19, 2015). 18. See Cook Cty. v. Wells Fargo & Co., 115 F. Supp. 3d 909, 913 21 (N.D. Ill. 2015). 19. See City of Miami v. JP Morgan Chase & Co., No. 1:14-cv-22205-WPD (S.D. Fla. Oct. 9, 2014) (order). Following the decisions on the trio of appeals, the case resumed, but has been stayed again pending the U.S. Supreme Court s decision. See City of Miami v. JP Morgan Chase & Co., No. 1:14-cv-22205-WPD (S.D. Fla. July 14, 2016) (order). 20. 800 F.3d 1262 (11th Cir. 2015), cert. granted, 136 S. Ct. 2544 (2016) (No. 15-1111). The Eleventh Circuit stated, This opinion contains the most detailed account of our reasoning. Id. at 1266 n.1. 21. City of Miami v. Wells Fargo & Co., 801 F.3d 1258 (11th Cir. 2015), cert. granted, 136 S. Ct. 2545 (2016) (No. 15-1112); City of Miami v. Citigroup Inc., 801 F.3d 1268 (11th Cir. 2015). 22. Bank of Am., 800 F.3d at 1269, 1272 73 (citing Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91 (1979); Cook Cty. v. Wells Fargo & Co., 115 F. Supp. 3d 909 (N.D. Ill. 2015)); see id. at 1272 ( Although the district court addressed only the issue of so-called statutory standing, the Bank contests both Article III standing and statutory standing, and we address each in turn. ).

552 The Business Lawyer; Vol. 72, Spring 2017 With respect to the question of statutory standing to sue under the FHA, on which the district court ruled, the Eleventh Circuit found that, under the Supreme Court s decision in Lexmark International, Inc. v. Static Control Components, Inc., 23 so-called statutory standing under the FHA extends as broadly as Article III will permit, so that the city s claims fell within the zone of interests protected by the FHA. 24 Discussing statutory standing, the Eleventh Circuit observed that [t]he scope and role of the zone of interests analysis in the FHA context is a difficult issue, and one that has sharply divided the courts that have considered it, noting the split between the Cook County case, which found that statutory standing was not co-extensive with Article III standing, and a Los Angeles case, which held to the contrary. 25 The Eleventh Circuit concluded that earlier Supreme Court holdings that statutory standing under the FHA was as broad as Article III standing were not overruled by Thompson v. North America Stainless, LP, 26 so that the city had statutory, as well as Article III, standing to bring its claims. 27 The Bank of America court also found that the city had adequately alleged causation, 28 and that it had plausibly invoked the continuing violation doctrine sufficiently to avoid limitations problems at the pleadings stage of the case. 29 At the end of its discussion of standing and other issues, the Eleventh Circuit noted that the Supreme Court s recent decision in Texas Department of Housing & Community Affairs v. Inclusive Communities Project 30 may materially affect the resolution of this case after remand. 31 The dicta in Inclusive Communities would, in the Eleventh Circuit s view, constitute the evolving law on disparate impact [in] the FHA context on which it could not pass judgment in the absence of an amended complaint. 32 The dicta that impose limits on FHA liability included: avoiding serious constitutional issues; protecting defendants from abusive disparate-impact claims ; allowing defendants to explain the interests served by their policies; the robust causality requirement ; and the requirement that disparate impact claims must be aimed at removing artificial, arbitrary, and unnecessary barriers rather than displac[ing] valid governmental and private priorities. 33 The Supreme Court granted certiorari on the Bank of America decision on the following questions: 23. 134 S. Ct. 1377 (2014). 24. Bank of Am., 800 F.3d at 1273. 25. Id. at 1277 (citing Cook Cty., 115 F. Supp. 3d at 915 18; City of Los Angeles v. JP Morgan Chase & Co., No. 2:14-cv-4168-DDW (RZx), 2014 WL 6453808, at *6 (N.D. Cal. Nov. 14, 2014)). 26. 562 U.S. 170 (2011). 27. Bank of Am., 800 F.3d at 1277 78. 28. Id. at 1282 83. 29. Id. at 1285 86. 30. 135 S. Ct. 2507 (2015). 31. Bank of Am., 800 F.3d at 1286. 32. Id. at 1287. 33. Id. (quoting Inclusive Communities, 135 S. Ct. at 2524).

Fair Lending Developments 553 1. By limiting suit to aggrieved person[s], did Congress require that an FHA plaintiff plead more than just Article III injury-in-fact? 2. The FHA requires plaintiffs to plead proximate cause. Does proximate cause require more than just the possibility that a defendant could have foreseen that the remote plaintiff might ultimately lose money through some theoretical chain of contingencies? 34 The Court also granted certiorari in the companion case of City of Miami v. Wells Fargo & Co. 35 The questions presented in that case were substantially the same as in Bank of America: 1. Whether the term aggrieved in the Fair Housing Act imposes a zone-of-interests requirement more stringent than the injury-in-fact requirement of Article III. 2. Whether the City is an aggrieved person under the Fair Housing Act. 36 FAIR LENDING ENFORCEMENT ACTIONS RACIAL AND NATIONAL ORIGIN DISCRIMINATION CASES The DOJ and the CFPB brought a joint enforcement action against Hudson City Savings Bank ( Hudson City ) for alleged discrimination on the basis of race and national origin in the origination of mortgage loans. 37 The agencies alleged that Hudson City violated the ECOA and the FHA when it engaged in a pattern or practice of redlining that denied residents in majority African-American and Hispanic neighborhoods fair access to mortgage loans from at least 2009 through 2013. 38 The settlement required Hudson City to invest $25 million in a loan subsidy fund for qualified borrowers in the affected communities, 39 invest $2.25 million in community programs, 40 and pay a $5.5 million penalty. 41 Hudson City will also open two new full-service branches in the affected areas. 42 According to the DOJ, this resolution was the largest residential mortgage redlining settlement in its history. 43 34. Questions Presented, Bank of Am. Corp. v. City of Miami, No. 15-1111 (U.S. June 28, 2016), https://www.supremecourt.gov/qp/15-01111qp.pdf. 35. 801 F.3d 1258 (11th Cir. 2015), cert. granted, 136 S. Ct. 2545 (2016) (No. 15-1112). No petition for certiorari was filed in the Citigroup case. 36. Questions Presented, Wells Fargo & Co. v. City of Miami, No. 15-1112 (U.S. June 28, 2016), https://www.supremecourt.gov/qp/15-01112qp.pdf. 37. Consent Order at 1, CFPB v. Hudson City Sav. Bank, F.S.B., No. 2:15-cv-07056-CCC-JBC (D.N.J. Nov. 4, 2015), http://files.consumerfinance.gov/f/201511_cfpb_hudson-city-consent-order. pdf. 38. Id. at 1 2. 39. Id. at 12. 40. Id. at 14 17. 41. Id. at 18. 42. Id. at 10 11. 43. See Press Release, U.S. Dep t of Justice, Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending Discrimination (Sept. 24, 2015), https://www.justice.gov/opa/pr/justice-department-and-consumerfinancial-protection-bureau-reach-settlement-hudson-city.

554 The Business Lawyer; Vol. 72, Spring 2017 On referral from the Federal Deposit Insurance Corporation ( FDIC ), the DOJ settled a case alleging racial discrimination with Eagle Bank and Trust Co. of Missouri ( Eagle Bank ), which resolved allegations of redlining in and around St. Louis. 44 The DOJ alleged that Eagle Bank engaged in a pattern or practice of redlining predominately African-American neighborhoods between 2006 and 2012, a violation of the FHA and the ECOA. 45 Under the terms of the consent order, Eagle Bank agreed to invest $800,000 in a program to increase the amount of credit the bank extends to majority African-American neighborhoods in the St. Louis area, spend $75,000 on consumer education programs, and spend $100,000 for outreach to potential customers. 46 Eagle Bank will also open two new branches to serve majority African-American neighborhoods around St. Louis and will conduct fair lending training for its employees. 47 Another referral from the FDIC 48 led the DOJ to enter into a consent order to resolve allegations that Sage Bank discriminated on the basis of race and national origin in the pricing of its mortgage loans, a violation of the FHA and ECOA. 49 The DOJ alleged that Sage Bank used a target pricing system from at least 2011 to at least 2014, resulting in African-American and Hispanic borrowers paying 104.44 and 61.05 basis points more, respectively, than similarly qualified white borrowers. 50 These higher rates allegedly resulted in African-American and Hispanic borrowers paying, on average, $2,452 and $1,438 more, respectively, than similarly qualified white borrowers. 51 Under the consent order, Sage Bank will pay $1,175,000 into a settlement fund to compensate borrowers who were harmed by its policies and will implement a new loan pricing policy along with a new loan officer compensation policy. 52 A referral from the U.S. Department of Housing and Urban Development ( HUD ) led to a DOJ lawsuit against Home Loan Auditors, LLC and others for allegedly discriminating against Hispanic homeowners, a violation of the FHA and the ECOA. 53 The complaint alleged that the companies and their principals, who are also defendants, targeted Hispanics and charged them approximately $5,000 for unnecessary home loan audits and predatory mortgage loan 44. Consent Order at 3, United States v. Eagle Bank & Trust Co. of Mo., No. 4:15-cv-01492 (E.D. Mo. Sept. 29, 2015), https://www.justice.gov/opa/file/779321/download. 45. Id. at 1 3. 46. Id. at 11 15. 47. Id. at 6 7. 48. See Press Release, U.S. Dep t of Justice, Justice Department Reaches Settlement with Sage Bank to Resolve Allegations of Mortgage Lending Discrimination (Nov. 30, 2015), https://www.justice.gov/ opa/pr/justice-department-reaches-settlement-sage-bank-resolve-allegations-mortgage-lending. 49. Consent Order at 1, United States v. Sage Bank, No. 1:15-cv-13969 (D. Mass. Nov. 30, 2015), https://www.justice.gov/opa/file/796371/download. 50. Id. at2. 51. Id. at3. 52. Id. at 4 10. 53. Complaint at 2 5, United States v. Home Loan Auditors, LLC, No. 3:16-cv-04839 (N.D. Cal. Aug. 23, 2016), https://www.justice.gov/opa/file/887201/download.

Fair Lending Developments 555 modification services. 54 The defendants allegedly targeted Hispanic homeowners exclusively in 2009 2010 for home loan audits and loan modifications. 55 The DOJ filed the complaint after HUD s conciliation was unsuccessful. 56 The DOJ is seeking monetary compensation for the complainants and all other people harmed by the practices. 57 HUD settled a case against First Tennessee Bank, resolving allegations that the bank discriminated against African-American and Hispanic applicants and failed to place branches in minority-concentrated areas, a violation of the FHA. 58 The case stemmed from a complaint filed by the National Community Reinvestment Coalition ( NCRC ) with HUD. 59 Under the conciliation agreement, First Tennessee Bank will establish a $1.5 million subsidy fund to provide interest rate reductions and down payment assistance to qualified borrowers, pay $270,000 to support partnerships with community-based organizations, spend $105,000 to fund similar services provided by the NCRC, and pay $25,000 in damages to the NCRC. 60 HUD brought another case involving alleged redlining against First Federal Bank of Kansas City ( First Federal ), which stemmed from complaints filed by two nonprofit organizations in Missouri. 61 The complainants alleged that: (1) First Federal s lack of market penetration in African-American neighborhoods made residential mortgage products less accessible to people based on race; and (2) First Federal defined its service area in a way that excluded areas with high African-American populations, a violation of the FHA. 62 As part of the conciliation agreement resolving the case, First Federal will provide $75,000 in discounts on mortgage loans in majority African-American census tracts and originate $2.5 million in mortgage loans in majority African-American neighborhoods over a three-year period. 63 First Federal must also donate $25,000 to each of the two complainants, pay $105,000 in subsidies to rehabilitate vacant blighted homes, spend $50,000 on marketing and outreach, and spend $30,000 to support financial education specifically targeting majority African-American neighborhoods. 64 54. Id. at 5 7. In contrast to... marketing materials, which were all in Spanish, Defendants required their clients to sign English-language contracts that were often not translated for them. Id. at6. 55. Id. at 11. 56. Id. at 12. 57. Id. at 16. 58. Conciliation Agreement at 2, Nat l Cmty. Reinv. Coal. v. First Tenn. Bank, N.A., No. 04-16- 0075-8 (HUD Feb. 1, 2016), http://portal.hud.gov/hudportal/documents/huddoc?id=15ncrc-v- FirstTennBank.pdf. 59. Id. 60. Id. at 4 5. 61. Conciliation Agreement at 2, Metro. St. Louis Equal Hous. & Opportunity Council v. First Fed. Bank, FSB, No. 07-16-0013-8 (HUD Feb. 29, 2016), http://portal.hud.gov/hudportal/ documents/huddoc?id=16-1fedexeconcil0224.pdf. 62. Id. 63. Id. at 5 6. 64. Id. at 4 7.

556 The Business Lawyer; Vol. 72, Spring 2017 HUD reached a conciliation agreement with Fidelity Bank ( Fidelity ) resolving allegations that Fidelity engaged in unfair lending practices against minority applicants. 65 The complaint filed by the Fair Housing Project of North Carolina Legal Aid alleged that Fidelity denied or made mortgage loans unavailable because of race, a violation of the FHA. 66 Under the agreement, Fidelity will spend $1 million on community investments and development loans in predominately minority census tracts. 67 In another race and national origin case, HUD settled a case against First- Citizens Bank & Trust Co. ( First-Citizens ), resolving allegations that First- Citizens disproportionately denied the loan applications of African-American and Hispanic applicants between 2010 and 2011, a violation of the FHA. 68 As part of the settlement, First-Citizens will make $140,000 available to nonprofit organizations that provide financial education, spend $20,000 on marketing and outreach to residents in majority-minority census tracts, develop more standardized objective lending guidelines, and hire three market specialists to focus on diverse lending. 69 A joint investigation by the DOJ and the CFPB resulted in a consent order with BancorpSouth Bank ( BancorpSouth ), resolving allegations that BancorpSouth violated the ECOA and FHA when it unlawfully redlined majority-minority neighborhoods. 70 The agencies alleged that BancorpSouth discriminated against African-Americans in the underwriting and pricing of mortgage loans. 71 Under the terms of the consent order, BancorpSouth will pay nearly $2.8 million in relief to affected customers, invest $4 million in a program to make mortgage loans more affordable to applicants in the affected area, invest at least $800,000 in advertising and community partnerships, and pay a $3 million civil penalty to the CFPB. 72 DISABILITY, SEX, AND FAMILIAL STATUS DISCRIMINATION CASES In a disability discrimination case, HUD alleged that Mortgage One, Inc. discriminated against a mortgage applicant with disabilities. 73 The complainant alleged that Mortgage One requested verification that he would remain on disability 65. Conciliation Agreement at 2, Fair Hous. Project Legal Aid of N.C., Inc. v. Fidelity Bank, No. 04-15-0308-8 (Apr. 22, 2016), http://portal.hud.gov/hudportal/documents/huddoc?id=16legal AidofNC.pdf. 66. Id. 67. Id. at4. 68. Conciliation Agreement at 1, Assistant Sec y for Fair Hous. & Equal Opportunity v. First- Citizens Bank & Trust Co., No. 00-12-0002-8 (HUD June 8, 2016), http://portal.hud.gov/ hudportal/documents/huddoc?id=16signed_conciliation.pdf. 69. Id. at 5 7. 70. Consent Order at 1, United States v. BancorpSouth Bank, No. 1:16-cv-00118-MPM-DAS (N.D. Miss. June 25, 2016), https://www.justice.gov/crt/file/879006/download. 71. Id. 72. Id. at 15, 24, 26 28, 29. 73. Conciliation Agreement at 2, Doe v. Doody, No. 05-15-1096-8 (HUD Nov. 17, 2015) [hereinafter Mortgage One Conciliation Agreement], http://portal.hud.gov/hudportal/documents/huddoc? id=15charge_doody.pdf.

Fair Lending Developments 557 for at least three years, a violation of the FHA. 74 Under the conciliation agreement resolving the case, Mortgage One will pay the complainant $10,000 and require the loan processor who handled the loan application to attend an FHA compliance course. 75 A second disability discrimination case involved similar allegations. The DOJ entered into a consent order with Evolve Bank & Trust ( Evolve ) to resolve allegations that Evolve discriminated against mortgage applicants who received disability income, by requiring some applicants to provide proof that their disability income would continue, a violation of the ECOA and the FHA. 76 The DOJ identified fifty affected borrowers, and, as part of the consent order, Evolve will establish a settlement fund of $86,000 for those borrowers. 77 Under the consent order, Evolve will also adopt new policies regarding proper documentation of disability income and conduct training of its underwriters and loan officers. 78 The sole case involving allegations of sex discrimination stemmed from a complaint by a woman who claimed that Citizens Bank discriminated against her based on her sex and familial status. 79 The complainant alleged that Citizens Bank told her that she would need to return to work from maternity leave in order to qualify for a home equity line of credit even though she received full pay during her leave, a violation of the FHA. 80 A conciliation agreement was reached in which Citizens Bank will pay the complainant $40,000, donate $75,000 to a HUD-approved fair housing advocacy program, and provide fair lending training to employees. 81 Citizens Bank will also adopt a new parental leave policy for borrowers to help ensure compliance with the FHA. 82 74. See Press Release, U.S. Dep t of Hous. & Urban Dev., HUD Reaches Agreement with Michigan Lender in Disability Discrimination Case (Nov. 17, 2015), http://portal.hud.gov/hudportal/hud? src=/press/press_releases_media_advisories/2015/hudno_15-147. 75. Mortgage One Conciliation Agreement, supra note 73, at 4 5. 76. Consent Order at 1 2, United States v. Evolve Bank & Trust, No. 2:16-cv-02040-SHM-tmp (W.D. Tenn. Jan. 19, 2016), https://www.justice.gov/opa/file/814161/download. 77. Id. at 4 5. 78. Id. at 3 4. 79. Conciliation Agreement at 2, Doe v. Citizens Bank, N.A., No. 03-15-0471-8 (HUD July 29, 2016), http://portal.hud.gov/hudportal/documents/huddoc?id=ca_fheocase03-15-0471-8.pdf. 80. Id. 81. Id. at 4 5. 82. Id. at5.