Case 1:09-cv-00644-WS-M Document 1 Filed 09/30/09 Page 1 of 10

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

CIVIL ACTION NO.

)

v.

)

09-0644

)

FIRST UNITED SECURITY BANK,

)

)

Defendant.

)

COMPLAINT The United States of America alleges: I. This action is brought by the United States to enforce the provisions of the Fair Housing Act, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.s.C. §§ 1691-1691f. 2. This Court has jurisdiction of this action pursuant to 28 U.S.C. § 1345,42 U.S.c. § 3614, and 15 U.S.C. § 1691(h). Venue is appropriate pursuant to 28 U.S.C. § 1391. 3. Defendant First United Security Bank (Bank) is a wholly-owned subsidiary of United Security Bancshares, Inc., a Delaware bank holding company. The Bank's principal office is in Thomasville, Alabama, and it does business primarily in the State of Alabama. 4. First United Security Bank was created in 1952 with five branches located in Clarke and Bibb counties in Alabama. The Bank currently operates nineteen banking offices in Clarke, Choctaw, Bibb, Shelby and Tuscaloosa counties in Alabama. 5. The Bank offers the traditional services of a financial depository and lending institution, including the receipt of monetary deposits and the financing of residential housing

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and commercial loans. As of December 31, 2007, the Bank had assets totaling just over $658 million. The Bank is subject to the regulatory authority of the Federal Deposit Insurance Corporation (FDIC).
6. The Bank is subject to the federal laws governing fair lending, including the Fair Housing Act and the Equal Credit Opportunity Act and their respective implementing regulations, the fair housing regulations of the Department of Housing and Urban Development, 24 C.F.R. § 100.1, et seq., and Regulation B of the Board of Governors of the Federal Reserve System, 12 C.F.R. § 202.1, et seq. The Fair Housing Act and the Equal Credit Opportnnity Act prohibit financial institutions from discriminating on the basis of, inter alia, race and color in their home-mortgage lending practices.
7. In December 2005 the FDIC conducted a compliance examination of the Bank. Based on information gathered in its examination, the FDIC determined that it had reason to believe that in 2004 the Bank engaged in a pattern or practice of home-mortgage lending discrimination against black applicants, on the basis of race, in the pricing of conventional, first-lien refinance loans on owner-occupied, one-to-four family properties, in violation of the Equal Credit Opportunity Act, the Fair Housing Act, and their implementing regulations.
8. Pursuant to IS U.S.C. §169Ie(g), the FDIC referred the matter to the Attorney General on October 23,2006, for appropriate enforcement action, following its determination as described in Paragraph 7.
9. Between at least January 2004 and December 2004, First United Security Bank loan officers did not use formal, written, uniform underwriting guidelines and procedures to set final interest rates for conventional, first-lien refinance loans on owner-occupied, one-to-four family
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properties. Loan officers were provided with standard rate sheets, but the Bank granted them broad discretion to engage in subjective decision-making and increase or decrease the rate up to one percentage point.
10. During the relevant time period referenced in Paragraph 9, First United Security Bank charged African-American borrowers higher rates of interest for conventional, first-lien refinance loans on owner-occupied, one-to-four family properties than it charged to similarlysituated white borrowers. The differences in the interest rates charged to African-American borrowers obtaining such refinance loans from the Bank and those charged to white borrowers cannot be explained fully by factors unrelated to race, such as differences in certain borrower and loan characteristics. The estimated interest rate differences, approximately 62 basis points (5/8 of a percentage point) between similarly situated African-American and white borrowers, are statistically significant.
II. As of December 31, 2007, First United Security Bank's Alabama market area included all of Clark, Choctaw, Bibb, Shelby, and Tuscaloosa counties and portions of Marengo, Sumter, Washington, Wilcox, Chilton, Hale, Monroe, Perry, and Jefferson counties, according to United Security Bancshares SEC Form 10K report. That report does not specify which portions of the latter nine counties are included in the Bank's market area; therefore, in this Complaint, references to the "Alabama Market Area" include all of Clark, Choctaw, Bibb, Shelby, Tuscaloosa, Marengo, Sumter, Washington, Wilcox, Chilton, Hale, Monroe, Perry, and Jefferson counties.
12. According to the 2000 Census, the Alabama Market Area consisted of 285 census tracts, of which 99 were majority black in population. The Alabama Market Area also included
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five counties that were majority black in population: Hale, Marengo, Perry, Sumter and Wilcox. The total population of the Bank's Alabama Market Area was more than 1.2 million persons, of whom 34.2% were African-American.
13. In operating and expanding the scope of its business over time, First United Security Bank has acted to meet the credit needs, particularly with respect to residential and small business credit, of predominantly white residential counties and census tracts (counties and census tracts with a population greater than 50% white) throughout the Alabama Market Area, and has avoided serving the similar credit needs of majority-black census tracts.
14. Over time, First United Security Bank has expanded its lending operations, particularly for the extension of credit for residential real estate-related transactions and small business purposes, to substantial portions of the Alabama Market Area, particularly in the northern and southern parts of that area. The Bank has both enlarged the geographic scope of the area within which it extends such credit and constructed or acquired additional branch offices, which are designed both to better serve existing customers and to attract new customers for the Bank's services and products.
15. First United Security Bank has engaged in a race-based pattern oflocating or acquiring branch offices. It has located or acquired branch offices in a manner designed to serve fully the banking and credit needs of the residents of, and small businesses located in, majoritywhite counties and census tracts, but not those of residents of or businesses located in majorityblack counties or census tracts.
16. By the end of the year 2006, First United Security Bank had 19 branch offices in the Alabama Market Area. Not one of those 19 branches was located either in a majority-black
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Case 1:09-cv-00644-WS-M Document 1 Filed 09/30/09 Page 5 of 10
census tract or anywhere in the five majority-black counties in the Bank's Alabama Market Area (Hale, Marengo, Perry, Sumter and Wilcox). See map attached as Exhibit I. Upon information and belief, those branches provided the Bank's full range of banking and credit services to each community in which they were located.
17. The unlawful consideration of race in First United Security Bank's business practices is also evident from its customer solicitation efforts, including its advertising and marketing practices. For example, the Bank has for years directed its radio advertising to stations that target "general audiences", although radio stations with a format targeted toward black audiences exist in the Alabama Market Area. The Bank also has never advertised in black-owned print media, though such outlets exist in the Alabama Market Area.
18. The unlawful consideration of race in the business practices of the Bank is also evident from the community service, or assessment area, boundaries that First United Security Bank has established and maintained pursuant to the Community Reinvestment Act ("CRA"). Pursuant to statutory direction, the Federal Reserve Board has promulgated regulations to implement the CRA, 12 C.F.R. §228 ("Reg BB"). Under Reg BB, as amended in 1997, a bank's assessment area ordinarily will consist of one or more metropolitan areas or contiguous political subdivisions, §228.4I(c), unless that area would be extremely large, of unusual configuration, or divided by significant geographic barriers, §228.41(d). Reg BB further provides that, if a bank's assessment area does not include entire political jurisdictions, its assessment area may not reflect illegal discrimination. §228.41 (e).
19. First United Security Bank has long maintained three assessment areas, one of which is geographically separated from the other two. Each of the three assessment areas includes parts
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of counties rather than entire political subdivisions, including parts of Marengo, Wilcox, Jefferson, and Tuscaloosa counties. The assessment areas exclude all of majority-black Hale, Perry, and Sumter counties; parts of majority-black Marengo and Wilcox counties; and all but one of the majority-black census tracts in the City of Tuscaloosa. The assessment areas also exclude the portion of Jefferson County that includes the City of Birmingham, which has numerous majority-black census tracts. See map attached as Exhibit 2. The inclusion of additional majority-black areas contiguous to the existing assessment areas would not have created assessment areas that were extremely large, of unusual configuration, or divided by significant geographic barriers, the only exceptions to inclusion of whole political jurisdictions that are specifically described by Reg BB.
20. The policies and practices of First United Security Bank, described in paragraphs 1119 above, have served majority-white communities to a significantly greater extent than majorityblack communities, as further demonstrated by the Bank's actual residential and CRA small business lending activity over time.
21. Statistical analyses of First United Security Bank's residential real estate-related loan applications and originations for 2004-2006 show that each year First United Security Bank has served the credit needs of the residents of majority-white census tracts of the Alabama Market Area to a significantly greater extent than it has served the residential real estate-related credit needs of the residents of majority-black census tracts in that Alabama Market Area.
22. From 2004-2006, First United Security Bank generated 1,563 single-family (defined by HMDA as dwellings with 1-4 units) residential loan applications in the Alabama Market Area that were required to be reported to its regulator pursuant to the I-lome Mortgage Disclosure Act
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Case 1:09-cv-00644-WS-M Document 1 Filed 09/30/09 Page 7 of 10
("HMDA"), 28 U.S.C. §§2801-281O. Only 218, or 14%, were secured by residential property located in majority-minority census tracts. See map attached as Exhibit 3. Overall during that time period comparable lenders in Alabama Market Area (those reporting a majority of higherpriced loans under HMDA) received, in aggregate, approximately 31 % of their applications from majority-black tracts. This percentage figure is more than two times that of First United Security Bank, and the difference is statistically significant.
23. The Bank's CRA small business loan originations for 2004-2006 show the same discriminatory pattern. Of the 2,134 CRA small business loans First United Security Bank originated in the Alabama Market Area from 2004-2006, only 245 (11.5%) were made to businesses located in majority-black tracts. See map attached as Exhibit 4. In contrast, during 2004-2006, the aggregate of all lending institutions reported that 21 % of their CRA small business loans in the Alabama Market Area were made to businesses located in majority-black census tracts. This percentage figure is almost two times that of First United Security Bank, and the difference is statistically significant.
24. The totality of First United Security Bank's policies and practices described in paragraphs 11-23 constitute the redlining of majority-black areas of the Alabama Market Area for the Defendant's lending business. The Bank's policies and practices are intended to deny and discourage, or have the effect of denying or discouraging, an equal opportunity to the residents of and businesses located in the majority-black neighborhoods of this Alabama Market Area, on account of the racial composition of those neighborhoods, to obtain residential real estate-related and/or small business credit. These policies and practices are not justified by business necessity or legitimate business considerations.
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25, The Bank's actions as alleged herein constitute: a, Discrimination on the basis of race or color in making available, or in the terms or conditions of residential real estate-related transactions, in violation of the Fair Housing Act, 42 U,S,c' § 3605(a); b, The making unavailable or denial of dwellings to persons because of race or color in violation of the Fair Housing Act, 42 U.S,C, § 3604(a); c, Discrimination on the basis of race or color in the terms, conditions, or privileges of the provision of services or facilities in connection with the sale or rental of dwellings, in violation of the Fair Housing Act, 42 U,S,C, § 3604(b); and d, Discrimination against applicants with respect to credit transactions, on the basis of race or color, in violation of the Equal Credit Opportunity Act, IS U,S,c' §1691(a)(l), 26, The Bank's policies and practices as alleged herein constitute: a, A pattern or practice of resistance to the full enjoyment of rights secured by the Fair Housing Act, 42 U,S.C, §§3601 et seq" and the Equal Credit Opportunity Act, IS U,S.C, §169Ie(h); and b, A denial of rights granted by the Fair Housing Act to a group of persons that raises an issue of general public importance, 27. Persons who have been victims of the defendant's discriminatory policies and practices are aggrieved persons as defined in 42 U,S,C, §3602(i) and as described in the Equal Credit Opportunity Act, 15 U,S,C. §1691(e)(i), and have suffered damages as a result of the defendant's conduct in violation of both the Fair Housing and the Equal Credit 0ppOliunity Acts, as described herein,
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28. The discriminatory policies and practices of the Bank have been intentional and willful, and implemented with reckless disregard for the rights of black borrowers.
WHEREFORE, the United States prays that the Court enter an ORDER that: (I) Declares that the policies and practices of the Bank constitute a violation of the Fair Housing Act and the Equal Credit Opportunity Act; (2) Enjoins the Bank, its agents, employees, and successors, and all other persons in active concert or participation with the Bank, from:
(A) Discriminating on account of race or color in any aspect of their lending business practices;
(B) Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of the Bartle's unlawful practices to the position they would be in but for the discriminatory conduct;
(C) Failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence of any discriminatory conduct in the future and to eliminate, to the extent practicable, the effects of the Bank's unlawful practices, and providing policies and procedures to ensure all segments of the Bank's market areas are served without regard to prohibited characteristics; (3) Awards monetary damages to all the victims of the Bank's discriminatory policies and practices for the injuries caused by the Bank, pursuant to 42 U.S.C. § 3614(d)(I)(B) and 15 U.S.C. § 1691e(h); and (4) Assesses a civil penalty against the Bank in an amount authorized by 42 U.S.C. § 3614(d)(l)(C), in order to vindicate the public interest.
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The United States further prays for such additional relief as the interests of justice may
reqUIre.
ERIC H. HOLDER, JR. Attorney General

GAR AN MOO E (MOORG685I) Assista nited S s Attorney 63 South Royal Street, Suite 600 Mobile, Alabama 36602 Telephone: 251-441-5845 Facsimile: 251-441-5051 gary .moore2@usdoj.gov

LORETTA KING Acting Assistant Att ney General Civil Rights Division
STEVEN H. ROSENBAUM Chief, Housing & Civil Enforcement Section
{)-<-~
DONNA M. MURP Deputy Chief
MA~V
Attorney U.S. Department of Justice Civil Rights Division Housing & Civil Enforcement Section 950 Pennsylvania Avenue, NW Washington, DC 20530 Telephone: 202-514-4733 Facsimile: 202-514-1116 marta.campos@usdoj.gov

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 Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 1 of 25

IN THE TINITED STATFS DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAIVIA

TJNIITED STATES OF AIVIERICA,

. Plaintiff,

CiVN ACTIOi$ NQ.

V,

09-0644

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FIRST TD,TITED SECURJTY B^A,NK,

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Defendanti::.i:i ;.ru:t

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AGRFELQRDFR roR B5p 0tuTiQN

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This Agreed Ordpr for Resolution ("Agreement") is submitted jointly by the parties for

the approval of and qntry by the. Csur-t simuitaneously with the filing of the United States'

cornplaint. The Agroement resolves the claims of the United States.that tJre ciefendarit, First

United Security Bank f'FUSE".or "the Banld'), violated the Fair Housing Act ("Fi{A"), 42 U.S.Q, $$ 3501-3619, and the Equal Credit Opportunity Aot ('FCQA'), l5 U.S.C.

$$ 1691-1691f; by engagrng in a pattern or practice of racial discriminaiion in the setting of interest rates for first-lien refinance loans originated in 2004 for bwrter-ocoupied one-to-four

family hor;ses and by failing to serve the lending needs of majority African-American sensus
.
tacts in west ceutral Aiabama on an equal basis with rnajority-white hacts.

Under the provisiorrs of this Agreement, the Bank has implernented and will continue to

implement policies and procedrues to ensure that the pricing of its residential loan products is

done in a ncndiscriminatory manner, consistent witir the reqriirements of the FHA and ECOA,

ard will compensate certain African-American borr:owers. Uuder the provisions of this

1'

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 2 of 25

Agreement, the Bank also will seek to imprgve its performance in meeting ths credit needs.of
residents located in majoriry-minorityr census h'acJs and ensure that its loan products and lending services ale av.ailable on an equil basis in ail residential areas in its market are4 regardless of racial composition.
The Eank deuies arry aileged violation of the FHA or tlre ECQA aad rnaintains that at all times it conducted its ierrding in compliance witllthe letter and spirit of the fair lending laws and in a non-discriminatory manner. There has been no factual finding or adjuclication with respect to any matter alleged by tire United States. Accordingly, the execntion of this Agreernent is not, dnd is'not to be conshued as, an adrnission or finding pf any violation qf the. FHA or the ECOA bythe 6ant<, Rather, botir parties have'entered into this Agreernent to resolve voluntarily the claims aslsrted by the United States in ordbr to avoicl the costs, r{sks and brirdens of litigatiqn.
il. FAIR LENDING INITIATIVES 1. Unless qtherwise stated herein, the prqvisiqns of this Section U qf the Agrcement
shall be implemented within forty five (45) days of the effective date qf this Agrebment and shall continue throughou! its term, The effective date qf tlfs Agreement shall be the date onvrhich'it is approved and enteired by the Court.
A. GeneralNoudiscriminatlonlnjunction 2. The BanJc, including all of its officers, employees, agents, representatives,
assignees andsuccessors in interest, and all thoss ili active concert or participation with any of {hem, is hetebg enjoined.from engaging in any aot ol Bractice which dissriminates qn the basis of

'

for purposes pf this Agreoment, tho term "majprity'black," "majority Aftican-American" or

'm4iority-minority" census tact is defined to mean a cehsus traot whose population is more than 50% black. The

mqiority-A*ican-.A.merican censlls tacts are listed on Appendix A, based on the 2000 Census.

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 3 of 25

tace or color in any aspect of a residential real estate+elated transaction in violation of the Fair

Horrsing Act,42U.S.C. $$ 3604 and 3605, or in any aspect of a credit thnsaction in violation of

lhe E51ual Credit Opportmity Aot, 15 U.S.C. $ 1691(aXl).
3. FUSB shall onsure that tlre Bank offers and provides all persons with an equal

opportunity to apply for and obtain credi! regardldss of the predominant rase or color of the

popuiatiou of the area in wlrich aperson livss, er tlre area in which the property securing the loan

or.the small brisiness is located

B. .Pricing Policy afid Procedures

.

4, In ear{y 2007,FUSB devetoped and imp}emented. a pricing matrix for residential

real estate-related loans based on credit scqring and other objective critqria. Under tlxis priqing

nratrix; any varip,lce from the published rate must be 4pproved in witing i1 advanse by both a

regional manager and the Senior Lender, Chibf Creclit Officer or Chief Bxeputive Qfficer of the

Banlc. Tlre Bank shall coirtinue utilizing ftis pricing matrix policy for residential real estate loans,

and shall modis the policy to include: (i) limits on the amqunt by which tlre interest rate may

deviate, either upward or dournwald, fi'om the interest rate as detennined by the matix; (ii) the

factors that a Banlc offic?l may consider in ihe exercise of that discretion; (iii) a requirement to

include in eaoh loan Jile vnitten documentetion qf the factors set forth in the pricing matrix and,

w,here the final interest rate varies fi'om the published rate, th9 factors rrdlied on in sonnection with

an individual loan application and howthose factors affected tire pricing decision; and (rv) a

requireurent that loau offioers infonn applicants in writing before an interest ratb is fixed, that the

intetest rate ip detennined by taking into account a variety of factois and flrat the interest rate rnay

be negotiable within the liniits set by fl:e loan policy. In addition, the polioy shall require the

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 4 of 25

Bank to post and prorninently display in each branch or ofilce a notice of non-discrimination.
5. The Bank shall provide a copy of its reviseci loanpricipg policy to couusel for the

Uuited States within thirty (30) days ofthe effectivg date ofthis Agreement.t The United States

shall have tldrly (30) days from receipt of the loan pricing policy to raise any objections to it, and

if it raises any, the parties shall confer to resolve their differences. In the event tlrey are unable to

do so, either party may bring the dispute to this Corrrt for resolution. Until the Court resgives sgch

a dispute, the revis.ed loan pricing policy will nqt go into effect.
6. The Banlc shall modiff its loan leview system fot residential real-estate reiated

loani in a ma$ner clesigned tg ensure conrpliance with the nondiscriminatign requirements of the

FHA, ECOA, and this Agreement. That systemshall require a cprarteriy review by a committee

comprised sf flre Ba:rk's chief exqcutive gfficet, seriior lending offlcer, and chief bredit offrcer.of

ali resi{ential recl-estate related loans originated duling the preceding quarter. Sach such

quarterly review shall be memorialiaed in qn'iting, signed and dated by a designated member of
I

I

I

the cornmi*ee referenced above, and shall be provided to the Fank's seniol exeoutive officers and

Board not later than thirty (30) days after the end qf sach quartor, Eac,h review shall inclucie,.but'

notbe limited to, a cornparison and analysis of the terms and oonditions, including the pricing, of

all HMDA.loans by the mce of the borro*ur.. In the event that any suoh review discloses

disfarities in tLe pricing of cbvered loans befwEen Afiisan-Amertcan and white boriowers, the

Bank shall promptly determine the reasori(s) foi'those pricing disparities and shaii promptly take

any conective action, if necessary, docirmenting both its determiiratiori and any remedial action.

' Alt rnaterial roquired by this Agreement to be sent to counsel for the Unitod States shall be sent by
comrnercial oveulight {elivery service addressed as follows: ghief Housing and Civil Enforoement Sectio4 Civil
Rights Division, U;S. Dopartment of Justice, 1800 G Sheet NW, trVashington, DC 20006, Attn: DJ 188€-2, or by facsimil e to 202- 5 14 -l | 7 6.

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 5 of 25
The Banlc shall provide these guarterly reviews andall documentation relating thereto, including docurirentation of its reasons for taking or not taking corrective action, to the United States on a quarterly basis.
7. During the term of this Agreement, the Banlc may change its loan pricing policy
for reside*tial real'estate loans upon wiffen advancs nbtice to the UnittO $tates, which shall have thirly (30) days from receipt of such nojice te raise arry objection to tlre Froppsed change. If it raises.any objection, the parties shall confer to reselve their differences. If they are unable to do so, eithet parlry rnay bring the dispute to this Court for resolution. The Banlc shall not implement the change during such a.dispute
C. The Banl('s Senlce Area 8. The Banlc shall take ail reasonable, practicable steps consistent with safety and
sortndness and this Agrdement, to ensure that re'side.ntiai and CRA small business loan products are rnade avaiiable ai:d marketed" in rnajority African-American census tacts in the followingAlabama corurtibs: Bibb, Chilton, Choctaw, Clarke, Ha1e, Jefferson, Marengo, Moru'ge, P"rry, $helby, Sumter; Tgscaloos4 Washington, Wilcox counties (lrereinafter "the rnajority a&ican-American census tacts') on no less'favorable a basis than in predorninairtly wldte areas. If flre Bank clrooses to take any actions in addition to those specifi.ed below to ashievs the goals of this Agreernent, it slrallprovide written notice to flre United Statss thirly (30) days,prior to implementation of any such additional actions druing the term ofthis Agreement,
Communitv Reinvestment Aet Assessment AreaS
9. In Septernber 2008, flre Bank revised its CRA assessment ax'eas. In the Tuscaloosa
IvISA assessnrent area, the Banlc added all of flre rnajority-African-American t'acts qf Ttucaloosa

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 6 of 25

County south of tlre Blaok Warrior River.s The Bank wilirevise its South Alabama assessment
area to include af least five (5) additional majority Af ican-American census t'acts. The Banlc shall maintain fhe revised QfiA assessment areas tluouglrsut the term of this Agreement. Nothing in this
Agreement precludes the Bank frorn expanding its CRA assessment aleas in the fliture in a rnarurel consistent with the provisions of the CRA arrd its implementing regulations.
10. The Bank shall provids e copy of the new proposed South Alabama assessment arca
to cormsel for the United States vvittiin ninety (90) days of the effective date of this Agreement. The United States shall have thirfy (30) days fi'om receipt of the proposed assessment area to raise any
objections to it, q'nd if it raises any, the parties shall confer to resolve theit differences. In the event they are unable to do so, eithpr party rn4y bring the disp$e to this Court for resolution. Until the Court resolves sugh a dispute, the proposed assessment area wiil not go into effect.
Sdi{i.q nal Brgrnch Locatrign -an d S ervlce-q
11, FUSB's rEsidential and CRA snrall business lending has been generated primarily
by.the ac.tivities of loan officers based in branch offices. Tlre Banlc shall evaluate flrture opportunities for exp'ansio. n, whether by acquisition or opening new offises, in a manner consistent with achieving the remedial goals of this Agreement.
t2. The Banlc slrall make all reasonable efforts, sudect to any and all required
govemment and regulatory approvals, to acqrrire or open o.ne (1) additional branch office located in
one of the major{ty African*Ar*erican censqs tracts within thi$-six (36) months ofthe date of enty of fhis'Agreement. The new branch will provide tle complete range of seruices typically
offered at the Bank's branohes within its existing assessment areas. These services encompass, but

t

The new proposed assessment areas are still subject to reviow and approval by the FDIC, as the Bank's

regulator.

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 7 of 25

are net limited to: (a) the ftll range of residential lending serviceso inciuding a futl-ti*e on-site

residential lending officer, and (b) both comparable information aboutbusiness- lending options and

comparable access to d business lending specialist.
13. Nothing in this Agreement preclucles the Fanli from opening or acquiring adclitional
brancir offices in the m{ority Af ican-A.rne*icau census hacts or elsewhere. Nor does any

provision of this Agreement recluire the Banlc tg consult wiflr the United States regarding its

opening or aqquisition of any other branclres or ofiises except as required by law.
J4, As soon as practioable in light of the crjrrent economic and bank regulatory

envilonmerit, the Bar:k shall present aprrcposal for the new branch to tlre United States for its

I'eview and approval, which shall nst be irnleasonably withheld, no later thau eighteen (18) nionths

'Once

after ihe date of enfry of this Agreement.

approved by the United States, wlrere necessary,

the Barrlc shall act as qujclcly as possible to obtain any required local or state govetnmental pennits

dnd appiovals and to seek the approval of its fecleral relulator, cun'ently the Federal Deposit'

.

i5, The Bank shall spend a minimurn of one hundred and ten thousar:d dollars

($110,000) on the targeted adve.rtising and marketing campaign d.escribecl in paragraphs (a)-(d)

belqw ovgr the term of this Agreement. This prograrn shall be specifically targeted to generate applications fqr all types of its cledit prodttcts ftom qualified residents and srnallbusinesses in tlre

majority African-Au:redcan censis tracts. This prograrn shall include, at a minimum, the following

components:
(a) B{int Mgdia. During each year of this Agteenrent, in eddition to any other print

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 8 of 25
adv.erlising, theBank shall advefiise in at least one print medium specifically directed to AfiicanAmerican readets.a Tlrese advertisemeuts, viewed iutbeir entirety over the ceurse of ayear, shall includs the Bank's frrll range of prinoipal creditprodurts, ioctuaing any special ploducts or services made available as part qf this Agreement. The Banlc rctains the discretion to detennine ' the size, contsnt, and ftequency of such adv.ertising, subjeet to the standards set fortlr. above.
&) R+.diq' During each year of this Agreeurent, the Bank shall place radio
advertisements on at least one (1) radio station whqse programrning is oriented topard Af ican-
Americau listeners. The radio advertising, viewed. in its entirety over the coruse of a year, shall include the Bank's full range of principal loan products, inclirding any sp.ecial products or senices made available rurder fJris Agreement. The Banlc retains the diseretion to deteunine the content and &equency ofsuch radio spots subjectto the standards set forfr above aud to piac" such advertising on additional minorify-oriented stations.
(c) P;pmqlipnd-,,[rlatqriplq. The Bank shl[ create point-of-distribulion materials, such
as posters and brochurgs, targeted toward tlre majority Afrioan-American cer:sus tracts to advertise pt'odrrctg and services i.t offers, includiqg any special loan products qr seivices made available pusuant to this Agreement. The $anlc shali place or display these promotional material$ in its.branch offices and additional, appropriate distributibn lqcations throughout the nrajority African-iAmelcan censris fl'a6ts, including but not limited tg, commuuity centers and supermarkets and other comnrercial establislrrnents,
(d) Direct Mpiliugs. The Bank alsq shail utilize direct rnailing to advertise the loan
prograru regnired'by this Agreement to residents and small businesses tlu'qughgut the majority
The Birndngltarn Times andthe Binningharu Weekly arctwo such outlets. -8-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 9 of 25
African-American census.tracts. These direct rnailings shall not be targeted exclusively or primarily at existing customers.
(e) Ail of the Bank's print advertising and promotional materials shail contain an
equal housing opporhrnity logotype, slogan, ot statement. All of the 3arilr's radio and television bdvertisernents shall include the audible statement "Equal'Opportunify Lender."
Credit Needs Assessment
16. Within thlee (3) months of the entry of this Ag.reement, the Bank shall begin an
assessment of the residential real estate-reiated and small business creciit needs of the rnajority
Af ican-Arnerican census tracts. This assessment shall include, but.not be limited to: (a) analysis
sf the most iecont available demographic and socioeQonomic data about those census tracts; (b)
-
evaluation of the residential and small business credit needs of and coffesponding lending opportunities in the majority African-Anierican census tractq; (c) consideration of lrow tfie Barik's residential and smali business lending opemtions can serve the goals of tlris Agreement; and (d) thofough review of the availability of relevant federal, state, and local ggverirmental programs and evaluation of how participation in each ofthem would assist in achieving the goais of this Agreenrent. The assQssment shall focus particuiarly on identifying effective ways to provide lending services'in the majority African-American cehsu$ h'acts where FU$B does not have a bratrch office. The Bank may retain outside parties to provide expert analysis and assistance in performing this assessment.
17. In dccompiishing this assessment, Bank representatives shall also meet with
representatives of at least tiu'ee (3) area comrnunily organizations located tluorrghout southwest and west central Alabama signifioant$ involved in promoting fair lending, home owrership, or

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 10 of 25

residential or small business developrnent in the majority African-American census t'acts. The

Bank may also meet with representatives of any other appropriate entities in conducting this needs

assessment

8. t

Tlre Bar:k shall present to counsel for the UnitEd States'a wriften reporl of this

special credit needs aqsessment, together with recomnreudations, if any, for actions beyond those

specified in this Agreement to be taken to meet those needs, not later than six (6) monflrs after the

enhy of this Agreement
19. For the term of this Agreemeut, tlre Bank shall meet anrrually with corrmrinity

organizations servicing the majority Af ican-American census ftacts as part of an ongoing,r.dit

needs assessment and evalilation of its business plan, in order to better rheet the residential and

small brisiness creclit nseds of the residents and small businesses in the majority

.A.frican-Anrerican ceqsus tracts.

Consurner Edircation
ffi
28. Tlreparties acknowledge that financially educated consumers are es$elrtial to

increasing the Ealrk's residential a:d small business lending in majority African-American census

tracts. To help identify and develop qualified loan applicants &orn the majority Ah'ican-American

census tacts, tlre Bank slrall host, co-host or sponsor at least four (4) sessions per every twelve

(12) months during the term of this Agreement to provide credit counseling, financial literacy,

busirrqss plarining, and other related educational programs targeted at the residents arrcl small
.
businesses in these areas. The Bank will qonsult with cominunity qrganizations and fair housing

grcilps to deterinine the most effective way of providing consumer edrication. The Banlc shall

invest sufficient fundsto effectively support the activities described in this paragraph 20,

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Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 11 of 25
D. Staff 2I. For the duration of this Agreerngnt, FUSB shall employ or designate aDirector pf
Community Lending (or similar title), whose primary responsibilities will include ensuring the Banlc's compliance with the FHA, BCOA and the Brovisions of this Agreement. If tlre Bar:lc
d.esignates a Director from within the Bank, the DOJ shall be notified and provided an opportuni.ty
to review tlre qualifications of this individual in ridv,ance. The Director will supervisethe
activities of loan offltcers regarding the solioitation aud origination of loans in majority A&ican-Arnericatr census tracts, including the special loan plograms identified in tlris Agreement; coordinate the Bank's involvement in communit5r iendir:g initiatives and outeach prcgrams; serve a$ a resource to iendirrg staff to encpruage and develop lending in majority Afican-Americar qensus tacts; ensure the ftai:ring of the staffat all branch offrces (both existiug and new) in all'
. aspects oftlre Bank's lending procesdeb; and report directly to the Fank's Board of pirectors on
the piogrdss of these irlitiatives at least quarterl;r, including recorunending changes in these
' prygrams to increase their'effectiveness. 22. Within sixty (60) days afterthe Bank's revisedloan pricing policy is approved by
the United States or the,Courti pursuant to palagraphs 4-5, FUSB shall provicle equal credit opportunity training to its rnanagement officials, loan officsrs, and any otlrer employees, or agents who: (a) pariicipate in the pricing qf residentiai real-estate loans, or (b) have significant involvement in apry Qspect of residential or CI{A smali business lending ("covered employees') During tliis training, the Bank shall provide'to eachparticipant (i) a copy of this Agreement and the Bank's revised loan plicing policy; and (ir) haining on the terms of this Agreenrent, the new loan pricing policy, the requirements of the FHA, ECOA and the Comraunity Reinveshnent Act,

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 12 of 25
and his or her responsibilities under each. The training required by this paragraph shall be conducted by an independent qualified tbircl party (at the Bank's expense) approved in advance by
the United States. The Banlc shall notiff *re United States in writing at ieast forty five (45) days in advance of the ploposed ttaining of the iderrtity qf the person or organization who will conduct the training. The United States shail have thirty (30) days from rpcerpt of sqch notification to raise any objectigns. If the United States timely sbjects, the parties shall confer to resolve thpir differenees. ln the evstrt they are unable.to do so, either party m4y bring the dispute to this Corut
for resolution.
23. The Bank shall secure from ezich covered employee a signed statement
acknowledging that he br she iras receiveci a copy of this.Agreement and the loarr pricing policy anci has completed flre initial equal credit oppartunity training. These stptemerrts shall be substantially inthe form bf Appeudix B (Ackrrowledgrnent) and Appendix C (Equal Credit Opportunity Training). During the tenn of the Agreement, each new covered employee shall be proqided a cqp.y of this Agreement and given an opporhrnity.to have any questions answered, and shall siguthe acknowleAgrrrrrrt form statement (Appendix B) within ten (10) days of beginning his or her en:ployment in that position.
24. During the tenn of t{ris Agreement, FUSB shall continue its praotice of providing
anrrual equal ciedit opportr:nity training to covered enrployees with respect to their responsibilities ar:d obligations under the FHA and the ECOA
E, Monetary Provisions 25. FUSB shall deposit in an interest-Learing escrow account tJre total surn of fifiy
thousand dollars ($50,000) for the purpose of paying damages to any "aggrieved person," defiaed
t.t

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 13 of 25

hereiq as anAfiioan-American bon'orver of aconventionaj, first-iieh refinance loan for an

owner-occupied, one-to-fory fanrily property who, between January 7,2004 and December 31,

2004, may have been gharged a higher interest ratE by tlre Banlc than a comparal2le wlritie borower (the "Se*lement Fund'). fne nank shall provicte witten verilication of the deposit to the United 'states within five (5) days of the effective dats of this Agrcement. Any interest that accrues shall

beconre part of the Settlement Fuld and be utilized qs set forfh lrereirr.
26. The United $tates has identified the aggrieved per$ons whq are eligible fof

competrsation uncler rlrt, Arr."roent. The United States shall, ripon re.asonable notice, be allowed

+ccess to the Bank's records and frles to verifr flre acouracy of the'data in the possession of the United $tates and tg othewise idenliff aggr{eved persons entitled, to the payments from the

Settlement Fund.

' 27. . '

Within forty five (45) days of the effective date of this Agreement, the United

Statps shatl provide to tlie Bank a list of the aggrieved persons and an ameunt it believes each

individual shall receive. from the Settlement Fund determined by a methodqlogy agrced to by the
partieg, subject to the conditions sst fortr in paragraph 29 below (the "Payment Lisf'). The Bank

shall have thfuty (30) days to review the PaymentList anci provide co;mments thereonto the

United States. The Unitbd States shall consider in gqod faith any such comments within thirty

(30) days of teceipt and shall confer with the Bank within such timefrarne te resolve any

diffetences. In tlre event they are unabla to do so, either pady may bririg the dispute to this Cowt

for resolution. No payment from tlre Settlement Fund may occur until the plocess described

above in this paragraph has been completed and flre Payment List.has besn finalized either by

agreement ofthe parties or by this Court.

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Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 14 of 25
28. W.ithin thirty (30) days of the date on which the Paym*rt List is finalized in
acsqrdance with the process provided for in paragraphLT above, the Unlteci States shall noti8 the aggrieved persolts. Th6reafter, the Unitecl States shall prqvide qounsel for FUSB with all executed releases that it receives. Withinten (10) days of the receipt of tire Releases, the Banlc shall issue ohecks, drawn bn the Settlement Fund, and mail the shecks to those aggieved persons who have exesuted and returned the Releases within ninety (90) days of receipt of the noti{ication from the United States. Jhe Bank shali provide a copy of each checlc to the United Slates. In the event that less than the total amount in the Settlement Fund, ineluding accrued Ltterest, is distibutedto aggrieved persolls, the remainder shall be returned to the Bank and shall no longer' be subject to claims by arty aggrieved per$ons.
29. Paymerrtg fi'orir the Settlement Fwrd to aggrievecl pelsons sJrall be sulljeit to the
following conditions:
(a) Nq aggrieved person sirall be paid any amount fi'omthe settlement Fund until after
the execution of,a wlitten release sf all claims, legal or equitable, whichhe gr she might have against the Bank regarding the claims asserte4 b)z the United States in flris la*suit, so long as such ilairns accruqd prior to the entry of this Agreement. The form of the release is set forth in Appendix D; and
(b) The total amount to bb paid by the Bank to the aggrieved persons shall not exceed
fifty thousand dollars ($50,000), plus the interest that lras accrued on the Settlement Fund.
' 30, In actdition to the monetary commitments detailed above, FUSB will invest a
minisrurn of five hunclred thousand dollars ($500,000) over the duration of ttris Agreement in a special fiqancing pra$a{n for residentiai and CI{A small business and community development
-14-

Case 1:09-cv-00, 6t4-'4* -WS-M Document 5 Filed 11/18/09 Page 15 of 25

loanst, which is dessribed below,6 ?hrough this special financilrg pregram, the Bank will offer
every qualified customer, whethet an individual or business (for CM smail business dnd
comr::unity development loans), in the majority Afiican-American census ttacts, loan proclrrcts at interest rates and/or on tenns that are more a.dvantageous to tire applicant than it would normally provide. Specifically, the Bank ra4y provide ono or nrore of tire following forms of financial assistance to any cluatified applicanr
(a) aHMDA-reportable loan (including without limitation a loan for home purohase,
refinincing, or horne improvement), a CRA small business loan and/or a coinmunity clevelopnrent
loan at an interest rate a rninimum of'lf-of a percentage point (50 basis points) below the otherwise prwailing rate, prov.ided that if the plwailing rate for any suph loan exceeds rc% at
any time during the teirn of this Agreemenf the interest rate subsidy shall be a minimum af !Yo,
ancl if theprevaiiing rate exceed s li2o/oat any time dtging the term of this Agreement, the subsidy slrall be a minimum of t.5%'l
(b) a loan at a lower interest rate to a\omower who would orclinartly not qualiff for

'

In this Agreemel4 comrnunitf developrnent loans are defined as those which meet the definition set folth iu

Fsderal Reserve Board Regulation Bp, 12 CFR 228,12(h).

u

With reqpect to the Bank's lrome mofigage subsidy program, no loan'griginated under this prqgram shall

e6ceed the thetr-conforming loan lirnit applicable to Farrnie lv1ae and Freddie Mac, as determined by tho Federal

Housing Finance Board.

?

For purposes of this Agreementn the loan subsidy amottnt calculation will be (a) the reductiqn in the monthly

payment from the standard fully-amqrtized rnonthly patniant based o:r the botlower's qualifications whicb vesults

fi'om the interest rate reduction the bonower reoeives times (b) the number of monthly payrnents for the tLne periods

as set forth below for.various loan types:

(i) HMDA loans at 39.3 rnonths;

iiil Snalt business loans at 15 months; and
(iii) Cornmunity developnent loans dt the tenh of the note,

If during tbe term of this Agleement, the Bank matedally modifies the term of its HMDA or CRA sn:all busitress loan products, then the parties will work together in good faith to equitably rnodiff the time periods in (i) or (ii) al2ove, as

the case may be. If tliey are unable tg reach agroement, either party may bring the dispute to this Coutt for

resolution. The Bank shall not inrplernent the change during such a dispute,

-lf-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 16 of 25

sgch rate for reasons iriclucling, for exanple, the lack of required credit quality, incoilte, or down

piyment;8
(c) a direot grant of a minimrrm of 2% ofthe loan amount, up to a ntar<inrum of 3a/0,

for tlre pilpose of down payment assistance; or
.
(d) closing cost assistance io ths form of (i) a direet grant of a minimrul of $500 and a
maximum of $1,000 or (ii) a waiv.er of costs in an amount between 2 arrd3% of the loan amount,'
' exsept for loags pnder the USDA Guaranteed Loan Program,.as to which a lYo fee waiver

satisfi es this provision.

'

L 3

T[aBanlc retains the discretion to offsr more than one, or all, of the foregoing

fonns of furancial assistance to qualified applicants on an iirdiviclual basis as it deems appropriate

. under the rrnique factual circumstances of aparticular application. The Bankwill exercise this discrqtion in a rnanner which maximizes the likelihood that it will originate a loan to a qualified

applicant, oonsistEntwith applicable rnderwriting guidelines, Ioan polioies, ntles and regulations,

and safety and soundness standarrds
: 3?.. The Bank shall have discretiorr to apportion, as it see$ flt, the special financing
program'$ loan subsidy amorg its residential ancl CRA small business ancl community 'development loan products. However, the Bani< shall use commerbially reasonable.efforts to
' irnplement the prograrn such that, gf the totai dollar volume of loans subsidized each year, at least

50%are CRA small business and/or comrnunity development loans.

33'T1reBankslral1makereasonab1eeffortstopromotearrequitabledishibutionof

these investnent frurds widely among the majority African-American censlrs h'acts.

8

Footnote no,7 above is incorporatedbyreferepce.

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Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 17 of 25

34, No provision ofthis Agreement, irrcluding this special finanoing program

commitment, requires the Bank to mako any unsafe or unsound loan. During the term of flris

$.greement, flre Bar.rlc shall assess the effectiveness qf this special fitrancing plograrn in achieving the Agreenrent's goals and shall recommend to the United States any changes it reasonably

believes ar€ necessary and appropriate to increase the progfam's effecfiveness. .
IiI. EyALUATTNG,AND MoNITQRINq COMPI-IAI,{C,E 35. For tlre duration of this Agreernent, FUSB shail fetain all records relating to its

obligations heleunder, including its residontial and small business lending actMties, as well as its

advertising, outeach, special programs; and other compliance activities as set forth'herein. The

. United Slates shall have the riglrt to rwiew agd oopy such records upgn request.
. 36. Fach yeai. for the duration of this Agrcement, the Banlc shall provide to counsel for
the United States the data it subrnits to the Federal Financial Institutions Examination Council

(yFIEC) pnrsuant to the Home Mortgage Disclosruo Act and the Community Reinvestment Act.

Such data, including tlre record lir;rdut, will be pfovided'in the sante format in which it is

presented tq the FFIBC within thi$y (30) days of its'submission to the FFIEC.

.37

Each year for lhe cluration of this Agleement, in addition to the submissiori of any

other plans or reports specified in this Agreement, FUSB shall make an annual rbport to the

United States on its progress in fulfilling the goals of this Agreem6nt. Bach such report shali '

pr.ovide a complete account of the Bank's actions to comply with each requirement of this

Agr.eement.cLuing the Brevious yearr an objective a,ssessment of the extent to which each quantifiable obligation was meq an explanation of why any particular componqnt fell short of

ureet?ng its goal for tlrat year, ancl any'I€commendations for additional actions to achievs the goals

-17-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 18 of 25

of this Agreement. The Banlc shall submitthis reiiort eachyear for the term of this Agreement within forty-five (45) days gf the anniversary of the date of the entry of this Agreement. In addition, tlre Ban1c shall atitach to the arxural repods representative copies of ttaining material and adver:tising and qarlceting rnaterials disseminated pursuant to this Agreement.
38. This Agreement shall be binding on the Bd(, including all its officers, employees,
agents, representatives, assignees, aad succcssors i:r interest, and all those in active concert or participation with any of them. in the eventthe Bank seeks to tansfer or assign all or part of its operations, ancl flre successor or assign intends on canying on the satne or similar usd, as a condition of sale, the Barrk shall obtain the written accession of the successor or assign to any obligations remaining under this Agreenrent for the rernaining tenn of this Agreetnent
ff. ADMINISTMTION 39. The Agreernent shall terminate (a) threq (3) months after the submission of the
pank s fourth annrral repoft to the United States (the "Termination Date'); (b) if the Court $ants a joint motion by the parties to terminate the Agreement prior to that date, which motion may be pr.oposed by'the Banlc at any time after the Agreementhas been in effect for tlxee (3) years, if the Bank has fully complied with all its tsrmsf or (o) if tlre Ba*k ha.s not iuvested $500,000 in its special {iuancing pro$am in four (4) yeals fi'omthe date of entry of tliis Agreement, tiuee months after th9 submission of the Banlc's final aniual repofi to tlrc United States, which shall be submitted after completing the invesh,ent required by the special financing program, It shall oniy be extended upon writfen agreement of the parties or' upon n:otion of tlre United states to the Court, for good cause shown,

e

The U. nited $tates shall not refuse to join ths Bank's rnotion if it concludes that the Bank has fully oomplied

with all the provisions ofthis Agteement.

-18-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 19 of 25

40, Any time limits fgr performance fixed by this.Agreement may be extended by

mutual written agreement of the parties. Qther modifications to this Agreement may be made only

upon approval of the Court, by motiqn of either party. The parties recognize that there may be

changes in relevant and material factual, economio andior financial circumstances duling tlre term

of this Agreement.which may irnpact the accomplishrnent of its goals. The parties agree to work

cooperatively to discuss and att6mpt to agree upon any prapa$ad rnqdificatious to this Agrcement

resulting from any such change in circumstances.
4t. In the event that arry disputes arise about the interpretation of ol compliance with

the terms of this Agreement, the parties shali eudeavor in good faith to resolve auy such dispute

bptween themselves befqre lringing it to this Court for resolution. The Unitsd States agrees that if it reasonably believes that the Bank has violated ary provision of this Agreeme.nt, it will

provide the Bank writtsn notice thereof and give it thir[y (30) clays to re$olve the alleged violation

before presenting the matter to this Coufi. ' In the event of either a failurs by flre Bank to per form

in a timely mannel arry act required b'y this Agreement 0r an act by tlre Eianlc in vioiation of any

C!* piavision lreleoi the United States.may move this

to impose any remedy authorized by law

or ecirrity, inclrrding attorneys' fees aild costs,
42. FUSB's compliance with the terms of this ,A.grcement shall fully and finally

resolve all clairns of the Unit*{ States arising prior to the effective date of tiris Agreement and

relating to the Bank's alleged violation of the fair lending laws by means of discriminatirig on the

basis of race or color, including without limitation all claims for equitable relief and monetary

damages and penalties. Each party to this Agreement shall bear its own costs and attorney's. fees

associatbd with this litigation.

-19-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 20 of 25

.43

The Court shall retain jurisdiction for the duration of this Ag:eement to enforce the

terms of the Agreemenl, after'which time the case shall be dismissed with prejudice.

so oRDERED, this *(tay ot
^!o{ML,,200e.

-20-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 21 of 25

The undersigaed hereby apply for rud consent to the entry of this Agreement:

For FirstUnited Secruity Bank

FortheUnited States
LorettaKiag Acting Assistant .A.ttonrey General
$teven H. Rosonbanm Cbief Housing and Civil Fnforcement Section

John P. Dulin, Jr. Mayrard Cooper and Galo, P.C, 1901 6thAveN#2400 2400 Regious/Harb ert Plaza
Birmingbam, Af 35203 ,
(205) 2s4-r000 (205) 254-1999 (fax) idulin@mavnardcoooer. com sbrorlln@malmjldcoqper.go"Ul
RonaldR. Qlansz VenableLLP 5757th. Skeet, NW Washington, DC 20004 Q02) 34Me47 QaD344-8300$ax) rglancz@vena$le.com

Attonrey U.S. De,parknent of Justice CiviiRigLts Division Hossing and Civil Buforcement Sootion 950 Ponnsylvania Avenue, N.W. WashiagtoE D.C. 20530 m$ta. campqs @,psdoj . gpy Q02)sr44733 (2AD s14-1116 (fax)
Eugene A.
Mobile, Alabama 36602 25L441-5845 251-441-5051 (fax)
ssstssgl€@@i#sy

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Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 22 of 25

AErpNprLA
Majority Black Census Tracts Source:2000 Census

I Tract 9567 Choctaw 2 Tract 9580 Clarlce 3 Tract 401 Hale 4 Tract 403 Hale 5 Tract 404llale 5 Tract 405 Hale 7 Tnct 1 Jefferson 8 TractS Jefferson 9 Tract 4 Jefferson
10 Tract 5 Jefferson 11 TractT Jefferson 12 Tract 8 Jefferson
il 13' Tract Jefferson
1,4 Tmctl}Jefferson
l5 Trast 14 Jefferson t6 Trapt 15 Jeffetson
17 Trbct 16 Jeffemon 18 Traot 19.02 Jefferson
l9 .Tract 20 Jeffer:son
20 Tract2l Jefferson
21, :kactZ?.Tefferson
22 Tract23.03 Jefferson 23 TractT{ Jefferson 24 Tract?T Jefferson 25 TrcctZ9 Jeffer.son 26 Tract 30.01 Jeffsrson 27 traot 30.02 .Iefferson 28 Tract3l Jefferson 29 Tract32 Jefferson 30 Tract 33 Jefferson 31 Tract34 Jefferson 32 Tract 35 .Iefferson 33 Tiact35 Jefferson 34 Tract 37 Jefferson 35 Tract 38.02 Jefferson 36 Tract 38.03 Jefferson 37 Trait 39 Jeffbrsou 38 Tract40 Jefferson

39 Tract42 Jeffersou
4I40 Tract 45 Jefferson Tract 5i.01 Jefferson
42 Tract 51,02 Jefferson 43 TraetST Jefferson 44 Tract 55 Jefferson 45 Tract 57.01 Jefferson 46 Ttaet 57.l?Jeffelson 47 Tract 58 Jefferson 48 Tract 59.06 Jefferson 49 Tract 101 Jefferson 50 Tractl02 Jefferson
5i Tract 103.01 Jeffelson
52 Tract 103.02 Jefferson 53 TracJ 104,01 Jefferson 54 Tract 105 Jefferson 55 Tract 106.02 Jefferson 56 Tract 106.03 Jeffslson 57 Traot 119.02 Jefferson 58 Tract 119.03 Jeffersqn 59 TraexL24,0l Jefferson 60 Tract 130.02 Jefferso:r 61 Tract 131 Je{ferson 62 Tract L32 Jefferson 63 Tract 133 Jefferson 64 Tract 134 Jeffersbn 55 Tract 135,01 Jeffsrson 66 Traot 138,01 Jefferson 67 Tract 139.01 Jefferson 58 Tract 141.05 Jefflerson 69 Tract9829 Marengo 70 Tract 9831 Marengo
7t Tiact 9832 Marengo
72 Tract 9856 Monros 73 tract ggsf Moruoe 74 Tlact 9858 Monroe 75 Tract9870Peny 76 Tract 9871 Perry
-22-

77 Tract 9872 Perry

78 Tract991l.Sun*er

79 Traot 9912 Sumtel

80 Tract 9913 Sumter
8i Tracj9915 Sumter

82 Tract 9916 $unrter

83' Tract 104.04 Tuscaloosa

84 Tract 105 Tuscaloosa

85 Tract 116 Tuscaloosa

86 Tract i17.01 Ttrscaloosa

87 Tract 117.03 Tusgaloosa

88 Tract 118 Tusoaiqosa

89 Tract i i9 Trrscaloosa '90 Tract 123.04 Trncaloosa

91. Tract 124.04 Tuscaloosa

92 Tract I24.AS Tuscaloosa

93 Tract 125.01 Tuscaloosa

94 Traot 128 Tuscaloosa

'9956

Traot Tract

9947 9948

Wilcox Wilcox

97 Tract 9949 Wilcox

98 Tract 9950 Wilcqx

99 Tract 9951 Wilcox

100 Tract 9570 Choctaw

10i Tract 9860 Moruo6

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 23 of 25

Employee Acknowledgment

I aclarowiedgs that on

2009,I was providecl copies sf the Ageed

Order for Resolution entered by tlre Cout in U"ni.tpd St#p v. Firel U,Sltpd Se$uigy,Sa$k, (S,D.

Ala.), and the loan pricing policy developed pursqant thereto. I have read and understand these

docrunents and have had rny ciuestions about tlrese docwnents answerecl. I understand my legal

respoasibilities and shall comply with those responsibilities.

$ignamre PrintName Job Title Date

'25-

Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 24 of 25

APPPD{DIK C Employee Tr.aining C g, f lifl cation

i certify that on

2009, I received training witir respect to my

lesporuibilities rurder the Agreed Order for Resolution entered by the Court in United Sta1gp v.

First Unilqd gecfuiry Bank, (S.D. Ala,), and the federal fair lending laws. I have had the

opport-unity to have my.questions about them answeled. .I understand my legal responsibilities not

to discriminate rmder flre federal fair lending laws, including the Equal Credit Opportunity Act

ancl the Fair Housing Act, and shall comply with those responsibilities.

Signature
PrintName Job Title

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Case 1:09-cv-00644-WS-M Document 5 Filed 11/18/09 Page 25 of 25

APPENDIX D

Release

In censideration for the parties' agrcement to the tenns of the Agreed Order for Resolrttion entered in United $tates v. Firpt Unit"p,S.SEeuritv Bank, (S.D. Ala.), and tlre Banlc's payment to nre
of$-"pru.suanttotlreAgreedQrc1erforResoltrtion,I1rerebyreleaseandforovsr
discharge all claims related to the facts at issue in the litigatiodreferenced above, or in any way. related to that litigatiou, and any other ciaims alising from the housing and credit discrimination alleged in that iitigatiori up to and including the date of execution of this rclease, that I may have against the Defendant, First United Security Banlq all related entities, parents, predecessors, successot's, subsidiaries, and affiliates, and all of their Bast and preser'rt dircoto. rs, officets, agents,' managers, supervisors, shareholderc and ernployees and their heirs, exeoqtors, administrators,
successols 0r asslgns.

Executed this
-

day of

2Q09.

$ignature PrintName Address

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 Case 1:09-cv-00644-WS-M Document 12 Filed 05/06/14 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

)

Defendant.

)

----------------------)

CIVIL ACTION NO. 1:09-cv-00644-WS-M

JOINT MOTION TO AMEND AGREED ORDER FOR RESOLUTION

Plaintiff United States and Defendant First United Security Bank ("FUSB" or "the

Bank") (collectively, the "Parties") respectfully move this Court to enter the signed Amended

Agreed Order for Resolution attached to this Motion as Exhibit A. The Parties state the

following in support ofthis Motion:

1. On November 18, 2009, this Court entered the Parties' proposed Agreed Order for

Resolution. (Dkt. No.5)

2. Among other things, the Agreed Order for Resolution requires FUSB to invest a

minimum of five hundred thousand dollars ($500,000) in a special financing program for the

Bank to use to offer specified forms of financial assistance for residential and CRA small

business and community development loans to applicants located in previously-underserved

majority-minority census tracts.

3. While FUSB has worked diligently to achieve the goals of the special financing

program, it has been unable to offer the specified forms of financial assistance at a volume that

1

Case 1:09-cv-00644-WS-M Document 12 Filed 05/06/14 Page 2 of 5
exhausted the requisite subsidy for the special financing program during the four-year term initially prescribed in the Agreed Order for Resolution.
4. For the reasons set forth in the accompanying memorandum, the Parties request that the Court enter the attached Amended Agreed Order for Resolution. The Amended Agreed Order provides FUSB with additional instruments for providing financial assistance intended to facilitate its ability to expend the subsidy through the special financing program by amending paragraph 30 of the Order. All other changes incorporated into the Amended Order are technical changes to the original Agreed Order.
WHEREFORE, the United States and First United Security Bank respectfully request that this Court enter the Amended Agreed Order for Resolution attached to this Motion as Exhibit A. Respectfully submitted on May 6, 2014.
2

Case 1:09-cv-00644-WS-M Document 12 Filed 05/06/14 Page 3 of 5

For First United Security Bank
Davia M. Smith (ASB-O'! 5-S83D) John P. Dulin, Jr. Mayuard, Cooper and Gale, P.C. 1901 6th Ave N # 2400 2400 RegionslHarbert Plaza Bh11lingham, AL 35203 (205) 254-1000 (205) 254-1999 (fax) £!!!.ill.ilh@&lllxmlJi!£90 1?£L£Q.l)1

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
Jon M. Seward Deputy Chief Marta Campos Attorney U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pelllsylvania Avenue, N.W. Washington, D.C. 20530 marta.mmlpos@usdoj.gov (202) 514-4733
(202) 514-1116 (fax)
Kenyen R. Brown United States Attorney

Holly 1. Wiseman (WIS .H7352) Special Assistant United States Attorney 63 South Royal Street, Suite 600 Mobile, Alabama 36602 holly. wiseman@usdoj.gov (251) 415-7104
(251) 441-5051 (fax)

Case 1:09-cv-00644-WS-M Document 12 Filed 05/06/14 Page 4 of 5 CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 6th day of May 2014, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all attorneys of record.
~~~c
Marta Campos Attorney U.S. Department of Justice
4

Case 1:09-cv-00644-WS-M Document 12 Filed 05/06/14 Page 5 of 5
Attachment A
5

Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 1 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

)

Defendant.

)

----------------------)

CIVIL ACTION NO. 1:09-cv-00644-WS-M

AMENDED AGREED ORDER FOR RESOLUTION

1. INTRODUCTION

This Amended Agreed Order ("Agreement") is submitted jointly by the parties for

approval and entry by the Court to modify the Agreed Order that was submitted jointly by the

parties simultaneously with the filing of the United States' Complaint in this action and approved

and entered by the Court on November 18,2009.

The Agreement resolves the claims of the United States that the defendant, First United

Security Bank ("FUSB" or "the Bank"), violated the Fair Housing Act ("FHA"), 42 U.S.C.

§§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-169lf, by

engaging in a pattern or practice of racial discrimination in the setting of interest rates for

first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and

by failing to serve the lending needs of majority African-American census tracts in west central

Alabama on an equal basis with majority-white tracts.

Under the provisions of this Agreement, the Bank has implemented and will continue to

implement policies and procedures to ensure that the pricing of its residential loan products is

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 2 of 26
done in a nondiscriminatory manner, consistent with the requirements of the FHA and ECOA, and will compensate certain African-American borrowers. Under the provisions of this Agreement, the Bank also will seek to improve its performance in meeting the credit needs of residents located in majority-minority! census tracts and ensure that its loan products and lending services are available on an equal basis in all residential areas in its market area, regardless of racial composition.
The Bank denies any alleged violation of the FHA or the ECOA and maintains that at all times it conducted its lending in compliance with the letter and spirit of the fair lending laws and in a non-discriminatory manner. There has been no factual finding or adjudication with respect to any matter alleged by the United States. Accordingly, the. execution of this Agreement is not, and is not to be construed as, an admission or finding of any violation of the FHA or the ECOA by the Bank. Rather, both parties have entered into this Agreement to resolve voluntarily the claims asserted by the United States in order to avoid the costs, risks and burdens of litigation.
II. FAIR LENDING INITIATIVES 1. Unless otherwise stated herein, the provisions of this Section II of the Agreement shall be implemented within forty five (45) days of the effective date of this Agreement and shall continue throughout its term. The effective date of this Agreement shall be the date on which it is approved and entered by the Court. A. General Nondiscrimination Injunction 2. The Bank, including all of its officers, employees, agents, representatives,
For purposes of this Agreement, the term "majority-black," "majority African-American" or "majority-minority" census tract is defined to mean a census tract whose population is more than 50% black. The majority-African-American census tracts are listed on Appendix A, based on the 2000 Census.
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 3 of 26
assignees and successors in interest, and all those in active concert or participation with any of them, is hereby enjoined from engaging in any act or practice which discriminates on the basis of race or color in any aspect of a residential real estate-related transaction in violation of the Fair Housing Act, 42 U.S.C. §§ 3604 and 3605, or in any aspect of a credit transaction in violation of the Equal Credit Opportunity Act, 15 U.s.C. § 1691(a)(I).
3. FUSB shall ensure that the Ban1( offers and provides all persons with an equal opportunity to apply for and obtain credit, regardless of the predominant race or color ofthe population of the area in which a person lives, or the area in which the property securing the loan or the small business is located.
B. Pricing Policy and Procedures 4. In early 2007, FUSB developed and implemented a pricing matrix for residential real estate-related loans based on credit scoring and other objective criteria. Under this pricing matrix, any variance from the published rate must be approved in writing in advance by both a regional manager and the Senior Lender, Chief Credit Officer or Chief Executive Officer of the Bank. The Bank shall continue utilizing this pricing matrix policy for residential real estate loans, and shall modify the policy to include: (i) limits on the amount by which the interest rate may deviate, either upward or downward, from the interest rate as determined by the matrix; (ii) the factors that a Bank official may consider in the exercise of that discretion; (iii) a requirement to include in each loan file written documentation of the factors set forth in the pricing matrix and, where the final interest rate varies from the published rate, the factors relied on in connection with an individual loan application and how those factors affected the pricing decision; and (iv) a requirement that loan officers inform applicants in writing before an interest
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 4 of 26

rate is fixed, that the interest rate is determined by taking into account a variety of factors and that the interest rate may be negotiable within the limits set by the loan policy. In addition, the policy shall require the Banlc to post and prominently display in each branch or office a notice of non-discrimination.
5. The Bank shall provide a copy of its revised loan pricing policy to counsel for the United States within thirty (30) days of the effective date ofthis Agreement.2 The United States shall have thirty (30) days from receipt ofthe loan pricing policy to raise any objections to it, and if it raises any, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. Until the Court resolves such a dispute, the revised loan pricing policy will not go into effect.
6. The Bank shall modify its loan review system for residential real-estate related loans in a manner designed to ensure compliance with the nondiscrimination requirements of the FHA, ECOA, and this Agreement. That system shall require a quarterly review by a committee comprised of the Bank's chief executive officer, senior lending officer, and chief credit officer of all residential real-estate related loans originated during the preceding quarter. Each such quarterly review shall be memorialized in writing, signed and dated by a designated member of the committee referenced above, and shall be provided to the Bank's senior executive officers and Board not later than thirty (30) days after the end of each quarter. Each review shall include, but not be limited to, a comparison and analysis of the terms and conditions, including the pricing, of all HMDA loans by the race of the borrowers. In the event that any such review

2

All material required by this Agreement to be sent to counsel for the United States shall be sent by

commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil

Rights Division, U.S. Depmtment of Justice, 1800 G Street NW, Washington, DC 20006, Attn: DJ 188-3-2, or by

facsimile to 202-514-1116.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 5 of 26
discloses disparities in the pricing of covered loans between African-American and white borrowers, the Bank shall promptly determine the reason(s) for those pricing disparities and shall promptly take any corrective action, if necessary, documenting both its determination and any remedial action. The Bank shall provide these quarterly reviews and all documentation relating thereto, including documentation of its reasons for taking or not taking corrective action, to the United States on a quarterly basis.
7. During the term of this Agreement, the Bank may change its loan pricing policy for residential real-estate loans upon written advance notice to the United States, which shall have thirty (30) days from receipt of such notice to raise any objection to the proposed change. If it raises any objection, the parties shall confer to resolve their differences. If they are unable to do so, either party may bring the dispute to this Court for resolution. The Bank shall not implement the change during such a dispute.
C. The Bank's Service Area 8. The BanIc shall talce all reasonable, practicable steps consistent with safety and soundness and this Agreement, to ensure that residential and CRA small business loan products are made available and marketed in majority African-American census tracts in the following Alabama counties: Bibb, Chilton, Choctaw, Clarke, Hale, Jefferson, Marengo, Monroe, Perry, Shelby, Sumter, Tuscaloosa, Washington, Wilcox counties (hereinafter "the majority African-American census tracts") on no less favorable a basis than in predominantly white areas. If the Bank chooses to talce any actions in addition to those specified below to achieve the goals of this Agreement, it shall provide written notice to the United States thirty (30) days prior to implementation of any such additional actions during the term of this Agreement.
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 6 of 26
Community Reinvestment Act Assessment Areas 9. In September 2008, the Bank revised its CRA assessment areas. In the Tuscaloosa MSA assessment area, the Bank added all of the majority-African-American tracts of Tuscaloosa County south of the Black Warrior River.3 The Bank will revise its South Alabama assessment area to include at least five (5) additional majority African-American census tracts. The Bank shall maintain the revised CRA assessment areas throughout the term of this Agreement. Nothing in this Agreement precludes the Bank from expanding its CRA assessment areas in the future in a manner consistent with the provisions of the CRA and its implementing regulations. 10. The Bank shall provide a copy of the new proposed South Alabama assessment area to counsel for the United States within ninety (90) days of the effective date ofthis Agreement. The United States shall have thirty (30) days from receipt of the proposed assessment area to raise any objections to it, and if it raises any, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. Until the Court resolves such a dispute, the proposed assessment area will not go into effect. Additional Branch Location and Services II. FUSB's residential and CRA small business lending has been generated primarily by the activities of loan officers based in branch offices. The Ban1e shall evaluate future opportunities for expansion, whether by acquisition or opening new offices, in a manner consistent with achieving the remedial goals of this Agreement.
The new proposed assessment areas are still subject to review and approval by the FDIC, as the Bank's regulator.
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 7 of 26
12. The Bank shall make all reasonable efforts, subject to any and all required government and regulatory approvals, to acquire or open one (1) additional branch office located in one of the majority African-American census tracts within thirty-six (36) months of the date of entry of this Agreement. The new branch will provide the complete range of services typically offered at the Bank's branches within its existing assessment areas. These services encompass, but are not limited to: (a) the full range of residential lending services, including a full-time on-site residential lending officer, and (b) both comparable information about business lending options and comparable access to a business lending specialist.
13. Nothing in this Agreement precludes the Bank from opening or acquiring additional branch offices in the majority African-American census tracts or elsewhere. Nor does any provision of this Agreement require the Bank to consult with the United States regarding its opening or acquisition of any other branches or offices except as required by law.
14. As soon as practicable in light of the current economic and bank regulatory environment, the Bank shall present a proposal for the new branch to the United States for its review and approval, which shall not be unreasonably withheld, no later than eighteen (18) months after the date of entry of this Agreement. Once approved by the United States, where necessary, the Bank shall act as quickly as possible to obtain any required local or state governmental permits and approvals and to seek the approval of its federal regulator, currently the Federal Deposit Insurance Corporation.
Advertising and Outreach 15. The Bank shall spend a minimum of one hundred and ten thousand dollars ($110,000) on the targeted advertising and marketing campaign described in paragraphs (a)-(d)
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 8 of 26

below over the term ofthis Agreement. This program shall be specifically targeted to generate applications for all types of its credit products from qualified residents and small businesses in the majority African-American census tracts. This program shall include, at a minimum, the following components:
(a) Print Media. During each year of this Agreement, in addition to any other print advertising, the Bank shall advertise in at least one print medium specifically directed to AfricanAmerican readers. 4 These advertisements, viewed in their entirety over the course of a year, shall include the Bank's full range of principal credit products, including any special products or services made available as part of this Agreement. The Bank retains the discretion to determine the size, content, and frequency of such advertising, subject to the standards set forth above.
(b) Radio. During each year of this Agreement, the Bank shall place radio advertisements on at least one (1) radio station whose programming is oriented toward AfricanAmerican listeners. The radio advertising, viewed in its entirety over the course of a year, shall include the Bank's full range of principal loan products, including any special products or services made available under this Agreement. The Bank retains the discretion to determine the content and frequency of such radio spots subject to the standards set forth above and to place such advertising on additional minority-oriented stations.
(c) Promotional Materials. The Bank shall create point-of-distribution materials, such as posters and brochures, targeted toward the majority African-American census tracts to advertise products and services it offers, including any special loan products or services made available pursuant to this Agreement. The Banle shall place or display these promotional

4

The Birmingham Times and the Birmingham Weekly are two such outlets.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 9 of 26
materials in its branch offices and additional, appropriate distribution locations throughout the majority African-American census tracts, including but not limited to, community centers and supermarkets and other commercial establishments.
(d) Direct Mailings. The Bank also shall utilize direct mailing to advertise the loan program required by this Agreement to residents and small businesses throughout the majority African-American census tracts. These direct mailings shall not be targeted exclusively or primarily at existing customers.
(e) All of the Bank's print advertising and promotional materials shall contain an equal housing opportunity logotype, slogan, or statement. All of the Bank's radio and television advertisements shall include the audible statement "Equal Opportunity Lender."
Credit Needs Assessment 16. Within three (3) months of the entry of this Agreement, the Bank shall begin an assessment of the residential real estate-related and small business credit needs of the majority African-American census tracts. This assessment shall include, but not be limited to: (a) analysis of the most recent available demographic and socioeconomic data about those census tracts; (b) evaluation of the residential and small business credit needs of and corresponding lending opportunities in the majority African-American census tracts; (c) consideration of how the Bank's residential and small business lending operations can serve the goals of this Agreement; and (d) thorough review of the availability of relevant federal, state, and local governmental programs and evaluation of how participation in each of them would assist in achieving the goals ofthis Agreement. The assessment shall focus particularly on identifying effective ways to provide lending services in the majority African-American census tracts where FUSB does not
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 10 of 26
have a branch office. The Bank may retain outside parties to provide expert analysis and assistance in performing this assessment.
17. In accomplishing this assessment, Bank representatives shall also meet with representatives of at least three (3) area community organizations located throughout southwest and west central Alabama significantly involved in promoting fair lending, home ownership, or residential or small business development in the majority African-American census tracts. The Bank may also meet with representatives of any other appropriate entities in conducting this needs assessment.
18. The Bank shall present to counsel for the United States a written report of this special credit needs assessment, together with recommendations, if any, for actions beyond those specified in this Agreement to be taken to meet those needs, not later than six (6) months after the entry of this Agreement.
19. For the term of this Agreement, the Bank shall meet armually with community organizations servicing the majority African-American census tracts as part of an ongoing credit needs assessment and evaluation of its business plan, in order to better meet the residential and small business credit needs of the residents and small businesses in the majority African-American census tracts.
Consumer Education 20. The parties acknowledge that financially educated consumers are essential to increasing the Bank's residential and small business lending in majority African-American census tracts. To help identify and develop qualified loan applicants from the majority African-American census tracts, the Bank shall host, co-host or sponsor at least four (4) sessions
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 11 of 26
per every twelve (12) months during the term of this Agreement to provide credit counseling, financial literacy, business planning, and other related educational programs targeted at the residents and small businesses in these areas. The Bank will consult with community organizations and fair housing groups to determine the most effective way of providing consumer education. The Bank shall invest sufficient funds to effectively support the activities described in this paragraph 20.
D. Staff 21. For the duration of this Agreement, FUSB shall employ or designate a Director of Community Lending (or similar title), whose primary responsibilities will include ensuring the Bank's compliance with the FHA, ECOA and the provisions of this Agreement. If the Bank designates a Director from within the Bank, the DOJ shall be notified and provided an opportunity to review the qualifications of this individual in advance. The Director will supervise the activities of loan officers regarding the solicitation and origination of loans in majority African-American census tracts, including the special'loan programs identified in this Agreement; coordinate the Bank's involvement in community lending initiatives and outreach programs; serve as a resource to lending staffto encourage and develop lending in majority African-American census tracts; ensure the training of the staff at all branch offices (both existing and new) in all aspects of the Bank's lending processes; and report directly to the Bank's Board of Directors on the progress ofthese initiatives at least quarterly, including recommending changes in these programs to increase their effectiveness. 22. Within sixty (60) days after the Bank's revised loan pricing policy is approved by the United States or the Court, pursuant to paragraphs 4-5, FUSB shall provide equal credit
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 12 of 26
opportunity training to its management officials, loan officers, and any other employees, or agents who: (a) participate in the pricing of residential real-estate loans, or (b) have significant involvement in any aspect ofresidential or CRA small business lending ("covered employees"). During this training, the Bank shall provide to each participant: (i) a copy of this Agreement and the Bank's revised loan pricing policy; and (ii) training on the terms of this Agreement, the new loan pricing policy, the requirements of the FHA, ECOA and the Community Reinvestment Act, and his or her responsibilities under each. The training required by this paragraph shall be conducted by an independent qualified third party (at the Bank's expense) approved in advance by the United States. The Bank shall notify the United States in writing at least forty five (45) days in advance of the proposed training of the identity of the person or organization who will conduct the training. The United States shall have thirty (30) days from receipt of such notification to raise any objections. Ifthe United States timely objects, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution.
23. The Bank shall secure from each covered employee a signed statement acknowledging that he or she has received a copy of this Agreement and the loan pricing policy and has completed the initial equal credit opportunity training. These statements shall be substantially in the form of Appendix B (Acknowledgment) and Appendix C (Equal Credit Opportunity Training). During the term of the Agreement, each new covered employee shall be provided a copy of this Agreement and given an opportunity to have any questions answered, and shall sign the aclmowledgment form statement (Appendix B) within ten (10) days of begiuning his or her employment in that position.
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24. During the term of this Agreement, FUSB shall continue its practice of providing annual equal credit opportunity training to covered employees with respect to their responsibilities and obligations under the FHA and the ECOA.
E. Monetary Provisions 25. FUSB shall deposit in an interest-bearing escrow account the total sum of fifty thousand dollars ($50,000) for the purpose of paying damages to any "aggrieved person," defined herein as an African-American borrower of a conventional, first-lien refinance loan for an owner-occupied, one-to-fourfamily property who, between January 1, 2004 and December 31, 2004, may have been charged a higher interest rate by the Bank than a comparable white borrower (the "Settlement Fund"). The Bank shall provide written verification ofthe deposit to the United States within five (5) days ofthe effective date of this Agreement. Any interest that accrues shall become part of the Settlement Fund and be utilized as set forth herein. 26. The United States has identified the aggrieved persons who are eligible for compensation under this Agreement. The United States shall, upon reasonable notice, be allowed access to the Bank's records and files to verify the accuracy of the data in the possession of the United States and to otherwise identify aggrieved persons entitled to the payments from the Settlement Fund. 27. Within forty five (45) days of the effective date of this Agreement, the United States shall provide to the Bank a list of the aggrieved persons and an amount it believes each individual shall receive from the Settlement Fund determined by a methodology agreed to by the parties, subject to the conditions set forth in paragraph 29 below (the "Payment List"). The Bank shall have thirty (30) days to review the Payment List and provide comments thereon to the
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 14 of 26
United States. The United States shall consider in good faith any snch comments within thirty (30) days of receipt and shall confer with the Bank within such timeframe to resolve any differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. No payment from the Settlement Fund may occur until the process described above in this paragraph has been completed and the Payment List has been finalized either by agreement of the parties or by this Court.
28. Within thirty (30) days of the date on which the Payment List is finalized in accordance with the process provided for in paragraph 27 above, the United States shall notify the aggrieved persons. Thereafter, the United States shall provide counsel for FUSB with all executed releases that it receives. Within ten (10) days of the receipt of the Releases, the Bank shall issue checks, drawn on the Settlement Fund, and mail the checks to those aggrieved persons who have executed and returned the Releases within ninety (90) days of receipt of the notification from the United States. The Bank shall provide a copy of each check to the United States. In the event that less than the total amount in the Settlement Fund, including accrued interest, is distributed to aggrieved persons, the remainder shall be returned to the Bank and shall no longer be subject to claims by any aggrieved persons.
29. Payments from the Settlement Fund to aggrieved persons shall be subject to the following conditions:
(a) No aggrieved person shall be paid any amount from the Settlement Fund until after the execution of a written release of all claims, legal or equitable, which he or she might have against the Bank regarding the claims asserted by the United States in this lawsuit, so long as such claims accrued prior to the entry of this Agreement. The form of the release is set forth
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in Appendix D; and (b) The total amount to be paid by the Bank to the aggrieved persons shall not exceed
fifty thousand dollars ($50,000), plus the interest that has accrued on the Settlement Fund. 30. In addition to the monetary commitments detailed above, FUSB will invest a
minimum of five hundred thousand dollars ($500,000) over the duration of this Agreement in a
special financing program for residential and eRA small business and community development
loanss, which is described below.6 Through this special financing program, the Bank will offer
every qualified customer, whether an individual or business (for eRA small business and
community development loans), in the majority African-American census tracts, loan products at interest rates and/or on terms that are more advantageous to the applicant than it would normally provide. Specifically, the Bank may-provide one or more of the following forms of financial assistance to any qualified applicant, to be provided directly by FUSB under paragraphs (a), (b) and (t), and either directly by FUSB and/or through a grant made to a qualifying community organization7 under paragraphs (c), (d), (e) and (g):
(a) a HMDA-reportable loan (including without limitation a loan for home purchase,
refinancing, or home improvement), a eRA small business loan and/or a community

In this Agreement, community development loans are defmed as those which meet the definition set forth in Federal Reserve Board Regulation BB, 12 CFR 228. 12(h).

6

With respect to the Bank's home mortgage subsidy program, no loan originated under this program shall

exceed the then-conforming loan limit applicable to Fannie Mae and Freddie Mac, as determined by the Federal

Housing Finance Board.

7

A qualifying community organization is defined as a non-profit organization that has among its goals the

furtherance in majority-black census tracts of affordable and/or fair housing or eRA small business or community

development loans. Such organizations will be selected by FUSB and approved by the United States, FUSB shall

include in the annual report it submits to the United States under paragraph 37 of this Agreement a detailed

description ofhow each organization that received a subsidy or grant under paragraph 30 of this Agreement used

such funds each year, including the total funds received from each subsidy or grant, each amount used, the date the

funds were used, and for what purpose.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 16 of 26

development loan at an interest rate a minimum rate of II, of a percentage point (50 basis points) below the otherwise prevailing rate, provided that if the prevailing rate for any such loan exceeds 10% at any time during the term of this Agreement the interest rate subsidy shall be a minimum of 1%, and if the prevailing rate exceeds 12% at any time during the term of this Agreement, the subsidy shall be a minimum of 1.5%;8
(b) a loan at a lower interest rate to a borrower who would ordinarily not qualify for such rate for reasons including, for example, the lack of required credit quality, income, or down payment;9
(c) a direct grant ofa minimum of2% of the loan amount, up to a maximum of3%, for the purpose of down payment assistance;
(d) closing cost assistance in the form of (i) a direct grant of a minimum of $500 and a maximum of$I,OOO or (ii) a waiver of costs in an amount between 2 and 3% of the loan amount, except for loans under the USDA Guaranteed Loan Program, as to which a 1% fee waiver satisfies this provision;
(e) providing the amount required to fund a qualified applicant's escrow account at closing, up to $3,500, in the form of a grant;

For purposes of this Agreement, the loan subsidy amount calculation will be (a) the reduction in the monthly payment from the standard fully-amortized monthly payment based on the borrower's qualifications which results fi'om the interest rate reduction the borrower receives times (b) the number of monthly payments for the time periods as set forth below for various loan types:
(i) HMDA loans at 39.3 months; (ii) Small business loans at 15 months; and (iii) Community development loans at the term of the note. If during the term of this Agreement, the Bank materially modifies the term of its HMDA or CRA small business loan products, then the parties will work together in good faith to equitably modify the time periods in (i) or (ii) above, as the case may be. If they are unable to reach agreement, either party may bring the dispute to this Court for resolution. The Bank shall not implement the change during such a dispute.

9

Footnote no. 8 above is incorporated by reference.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 17 of 26

(f) purchasing interest free mortgage loans originated by a qualifying community organization that builds affordable housing for families in majority-black census tracts who are in need of shelter, or originating mortgage loans to borrowers under a special purpose credit program to purchase homes built by such a qualifying community organization; or
(g) providing grant funds to qualifying community organizations for the establishment of "cash reserve repair fund" accounts. These pre-paid savings accounts will be opened at FUSB by the qualifying community organization for the benefit of the homeowner and, subject to approval by the qualifying community organization administering the account, may be used for home repair and maintenance expenses or if a qualifying life emergencylO prevents the homeowner from making his or her mortgage payments. The homeowner will receive up to $3,500 in the pre-paid savings account and the qualifying community organization will receive a $500 administrative fee from the grant funds provided by FUSB, for a total grant of up to $4,000 per homeowner. The term of these accounts is three years, after which time any remaining money will be transferred to the homeowner. In addition, either FUSB or the qualifying community organization will provide the homeowner with information describing checking and savings accounts at FUSB. If the homeowner so chooses, the homeowner may open a type of account offered at FUSB in the homeowner's name.
31. The Bank retains the discretion to offer more than one, or all, of the foregoing forms of financial assistance to qualified applicants on an individual basis as it deems appropriate under the unique factual circumstances of a particular application. The Bank will

\0

A qualifying life emergency includes, but is not limited to, unexpected health expenses, automobile repairs,

home repairs, temporary unemployment or other expenses or emergencies approved by the non-profit organization

or qualifying community organization that temporarily impairs a homeowner's ability to make mortgage payments.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 18 of 26
exercise this discretion in a manner which maximizes the likelihood that it will originate a loan to a qualified applicant, consistent with applicable underwriting guidelines, loan policies, rules and regulations, and safety and soundness standards.
32. The Bank shall have discretion to apportion, as it sees fit, the special financing program's loan subsidy among its residential and CRA small business and community development loan products. However, the Bank shall use commercially reasonable efforts to implement the program such that, of the total dollar volume ofloans subsidized each year, at least 50% are CRA small business and/or community development loans.
33. The Bank shall make reasonable efforts to promote an equitable distribution of these investment funds widely among the majority African-American census tracts.
34. No provision of this Agreement, including this special financing program commitment, requires the Bank to make any unsafe or unsound loan. During the term of this Agreement, the Bank shall assess the effectiveness ofthls special financing program in achieving the Agreement's goals and shall recommend to the United States any changes it reasonably believes are necessary and appropriate to increase the program's effectiveness.
III. EVALUATING AND MONITORING COMPLIANCE 35. For the duration of this Agreement, FUSB shall retain all records relating to its obligations hereunder, including its residential and small business lending activities, as well as its advertising, outreach, special programs, and other compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request. 36. Each year for the duration of this Agreement, the Bank shall provide to counsel for the United States the data it submits to the Federal Financial Institutions Examination
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 19 of 26
Council (FFIEC) pursuant to the Home Mortgage Disclosure Act and the Community Reinvestment Act. Such data, including the record layout, will be provided in the same format in which it is presented to the FFIEC within thirty (30) days of its submission to the FFIEC.
37. Each year for the duration of this Agreement, in addition to the submission of any other plans or reports specified in this Agreement, FUSB shall make an annual report to the United States on its progress in fulfilling the goals of this Agreement. Each such report shall provide a complete account of the Bank's actions to comply with each requirement of this Agreement during the previous year, an objective assessment of the extent to which each quantifiable obligation was met, an explanation of why any particular component fell short of meeting its goal for that year, and any recommendations for additional actions to achieve the goals of this Agreement. The Bank shall submit this report each year for the term of this Agreement within forty-five (45) days of the anniversary of the date of the entry of this Agreement. In addition, the Bank shall attach to the annual reports representative copies of training material and advertising and marketing materials disseminated pursuant to this Agreement.
38. This Agreement shall be binding on the Bank, including all its officers, employees, agents, representatives, assignees, and successors in interest, and all those in active concert or participation with any of them. In the event the Bank seeks to transfer or assign all or part of its operations, and the successor or assign intends on carrying on the same or similar use, as a condition of sale, the Bank shall obtain the written accession of the successor or assign to any obligations remaining under this Agreement for the remaining term of this Agreement.
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 20 of 26

IV. ADMINISTRATION 39. The Agreement shall terminate (a) three (3) months after the submission of the Bank's fourth annual report to the United States (the "Termination Date"); (b) if the Court grants a joint motion by the parties to terminate the Agreement prior to that date, which motion may be proposed by the Bank at any time after the Agreement has been in effect for three (3) years, if the Bank has fully complied with all its terms;ll or (c) if the Bank has not invested $500,000 in its special financing program in four (4) years from the date of entry of this Agreement, three months after the submission of the Bank's final annual report to the United States, which shall be submitted after completing the investment required by the special financing program. It shall only be extended upon written agreement of the parties or, upon motion of the United States to the Court, for good cause shown. 40. Any time limits for performance fixed by this Agreement may be extended by mutual written agreement of the parties. Other modifications to this Agreement may be made only upon approval of the Court, by motion of either party. The parties recognize that there may be changes in relevant and material factual, economic and/or financial circumstances during the term of this Agreement which may impact the accomplishment of its goals. The parties agree to work cooperatively to discuss and attempt to agree upon any proposed modifications to this Agreement resulting from any such change in circumstances. 41. In the event that any disputes arise about the interpretation of or compliance with the terms ofthis Agreement, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to this Court for resolution. The United States agrees that

II

The United States shall not refuse to join the Bank's motion if it concludes that the Bank has fully complied

. with all the provisions of this Agreement.

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 21 of 26
ifit reasonably believes that the Bank has violated any provision of this Agreement, it will provide the Bank written notice thereof and give it thirty (30) days to resolve the alleged violation before presenting the matter to this Court. In the event of either a failure by the Bank to perform in a timely manner any act required by this Agreement or an act by the Bank in violation of any provision hereof, the United States may move this Court to impose any remedy authorized by law or equity, including attorneys' fees and costs.
42. FUSB's compliance with the terms of this Agreement shall fully and finally resolve all claims of the United States arising prior to the effective date ofthis Agreement and relating to the Banle's alleged violation ofthe fair lending laws by means of discriminating on the basis of race or color, including without limitation all claims for equitable relief and monetary damages and penalties. Each party to this Agreement shall bear its own costs and attorney's fees associated with this litigation.
43. The Court shall retain jurisdiction for the duration of this Agreement to enforce the terms of the Agreement, after which time the case shall be dismissed with prejudice.
SO ORDERED, this _ _day of _ _ _ _ _ _., 2014.
UNITED STATES DISTRICT COURT JUDGE
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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 22 of 26

The undcrsigned hCJ'cby apply for and consent to the entry of this Agreement:

For First United Security Bank
#~,
David M. Smith (ASB-0455-S83D)
John P. Dulin, Jr.
Maynard, Cooper and Gale, P.C. 1901 6th Ave N # 2400 2400 Regions/Harbert Plaza Birmingham, AL 35203 (205) 254-1000 (205) 254-1999 (fax) ri.lllni tl1@m'lvnacd"ooDer.com

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
Deputy Chief Marta Campos Attol'l1ey U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 PelUlsylvania Avemle, N. W. Washington, D.C. 20530
11latta.can1pQs~llusdQj.gov
(202) 514-4733 (202) 514-1116 (fax)

Kenyen R. Bro:wn United States Attomey

~~k--
Holly 1. Wiseman (WISE 352) Special Assistant United States Attomey 63 South Royal Street, Suite 600 Mobile, Alabama 36602 holly.wiseman@usdoj.gov (251) 415-7104 (251) 441-5051 (fax)

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 23 of 26

APPENDIX A Majority Black Census Tracts
Source: 2000 Census

1 Tract 9567 Choctaw 2 Tract 9580 Clarke 3 Tract 401 Hale 4 Tract 403 Hale 5 Tract 404 Hale 6 Tract 405 Hale 7 Tract 1 Jefferson 8 Tract 3 Jefferson 9 Tract 4 Jefferson 10 Tract 5 Jefferson 11 Tract 7 Jefferson 12 Tract 8 Jefferson 13 Tract 11 Jefferson 14 Tract 12 Jefferson 15 Tract 14 Jefferson 16 Tract 15 Jefferson 17 Tract 16 Jefferson 18 Tract 19.02 Jefferson 19 Tract 20 Jefferson 20 Tract 21 Jefferson 21 Tract 22 Jefferson 22 Tract 23.03 Jefferson 23 Tract 24 Jefferson 24 Tract 27 Jefferson 25 Tract 29 Jefferson 26 Tract 30.01 Jefferson 27 Tract 30.02 Jefferson 28 Tract 31 Jefferson 29 Tract 32 Jefferson 30 Tract 33 Jefferson 31 Tract 34 Jefferson 32 Tract 35 Jefferson 33 Tract 36 Jefferson 34 Tract 37 Jefferson 35 Tract 38.02 Jefferson 36 Tract 38.03 Jefferson 37 Tract 39 Jefferson 38 Tract 40 Jefferson 39 Tract 42 Jefferson

40 Tract 45 Jefferson 41 Tract 51.01 Jefferson 42 Tract 51.02 Jefferson 43 Tract 52 Jefferson 44 Tract 55 Jefferson 45 Tract 57.01 Jefferson 46 Tract 57.02 Jefferson 47 Tract 58 Jefferson 48 Tract 59.06 Jefferson 49 Tract 101 Jefferson 50 Tract 102 Jefferson 51 Tract 103.01 Jefferson 52 Tract 103.02 Jefferson 53 Tract 104.01 Jefferson 54 Tract 105 Jefferson 55 Tract 106.02 Jefferson 56 Tract 106.03 Jefferson 57 Tract 119.02 Jefferson 58 Tract 119.03 Jefferson 59 Tract 124.01 Jefferson 60 Tract 130.02 Jefferson 61 Tract 131 Jefferson 62 Tract.13 2 Jefferson 63 Tract 13 3 Jefferson 64 Tract 134 Jefferson 65 Tract 136.01 Jefferson 66 Tract 138.01 Jefferson 67 Tract 139.01 Jefferson 68 Tract 141.05 Jefferson 69 Tract 9829 Marengo 70 Tract 9831 Marengo 71 Tract 9832 Marengo 72 Tract 9856 Momoe 73 Tract 9857 Momoe 74 Tract 9858 Momoe 75 Tract 9870 Perry 76 Tract 9871 Perry 77 Tract 9872 Perry 78 Tract 9911 Sumter
-23-

79 Tract 9912 Sumter 80 Tract 9913 Sumter 81 Tract 9915 Sumter 82 Tract 9916 Sumter 83 Tract 104.04 Tuscaloosa 84 Tract 105 Tuscaloosa 85 Tract 116 Tuscaloosa 86 Tract 117.01 Tuscaloosa 87 Tract 117.03 Tusc!!loosa 88 Tract 118 Tuscaloosa 89 Tract 119 Tuscaloosa 90 Tract 123.04 Tuscaloosa 91 Tract 124.04 Tuscaloosa 92 Tract 124.05 Tuscaloosa 93 Tract 125.01 Tuscaloosa 94 Tract 128 Tuscaloosa 95 Tract 9947 Wilcox 96 Tract 9948 Wilcox 97 Tract 9949 Wilcox 98 Tract 9950 Wilcox 99 Tract 9951 Wilcox 100 Tract 9570 Choctaw 101 Tract 9860 Momoe

Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 24 of 26

APPENDlXB Employee Acknowledgment

I acknowledge that on

, 2009, I was provided copies of the Agreed

Order for Resolution entered by the Court in United Statesv. First United Security Bank, (S.D.

Ala.), and the loan pricing policy developed pursuant thereto. I have read and understand these

documents and have had my questions about these documents answered. I understand my legal

responsibilities and shall comply with those responsibilities.

Signature Print Name Job Title Date

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 25 of 26

APPENDIXC Employee Training Certification

I certify that on

, 2009, I received training with respect to my

responsibilities under the Agreed Order for Resolution entered by the Court in United States v.

First United Security Bank, (S.D. Ala.), and the federal fair lending laws. I have had the

opportunity to have my questions about them answered. I understand my legal responsibilities

not to discriminate under the federal fair lending laws, including the Equal Credit Opportunity

Act and the Fair Housing Act, and shall comply with those responsibilities.

Signature Print Name Job Title Date

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Case 1:09-cv-00644-WS-M Document 12-1 Filed 05/06/14 Page 26 of 26

APPENDIXD

Release

In consideration for the parties' agreement to the terms of the Agreed Order for

Resolution entered in United States v. First United Security Bank, (S.D. Ala.), and the Bank's

payment to me of $

, pursuant to the Agreed Order for Resolution, I hereby release

and forever discharge all claims related to the facts at issue in the litigation referenced above, or

in any way related to that litigation, and any other claims arising from the housing and credit

discrimination alleged in that litigation up to and including the date of execution of this release,

that I may have against the Defendant, First United Security Bank, all related entities, parents,

predecessors, successors, subsidiaries, and affiliates, and all of their past and present directors,

officers, agents, managers, supervisors, shareholders and employees and their heirs, executors,

administrators, successors or assigns.

Executed this _ day of _ _ _ _ _, 2009.

Signature Print Name
Address

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Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 1 of 6

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

)

Defendant.

)

~--------------------)

CIVIL ACTION NO. 1:09-cv-00644-WS-M

MEMORANDUM IN SUPPORT OF JOINT MOTION TO AMEND AGREED ORDER FOR RESOLUTION

Plaintiff United States and Defendant First United Security Bank ("FUSB" or "the

Bank") (collectively, the "Parties") respectfully submit the following memorandum in support of

their Joint Motion to Amend the Agreed Order entered by this Court on November 18,2009.

BACKGROUND

On September 30,2009, the United States filed a complaint alleging that First United

Security Bank engaged in a pattern or practice of racial discrimination in the setting of interest

rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family

houses and by failing to serve the lending needs of majority African-American census tracts in

west central Alabama on an equal basis with majority-white tracts. (Dkt. No.1.) On that same

day, the Parties filed a proposed Agreed Order for Resolution settling all the claims brought in

the case. (Dkt. No.2.) On November 18, 2009, this Court entered the Agreed Order. (Dkt. No.

5.)

Among other things, the Agreed Order requires FUSB to invest a minimum of five

hundred thousand ($500,000) in a special financing program for the Bank to use to offer

specified forms of financial assistance for residential and CRA small business and community

Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 2 of 6

development loans to applicants located in previously-underserved majority-minority census

tracts. (Id. ~~ 30-34.) While FUSB has worked diligently to achieve the goals ofthe special

financing program, it has been unable to offer the specified forms of financial assistance at a

volume that exhausted the requisite subsidy for the special financing program during the four-

year term initially prescribed in the Agreed Order for Resolution. Accordingly, after extensive

discussions, the Parties agreed to amendments to the Agreed Order that will permit the Bank to

offer ad~itional forms of financial assistance and thereby expend the funds through the special

financing program to more effectively serve the applicants in previously-underserved majority-

minority census tracts. The Parties now move the Court to approve the agreed amendments to

paragraph 30 of the Agreed Order, I discussed more thoroughly below, and enter the Amended

Agreed Order attached as Exhibit A to the Motion to Amend the Agreed Order.

ARGUMENT

I.

This Court Has Jurisdiction To Enter the Amended Agreed Order

The Agreed Order provides that the Order "shall terminate ... three (3) months after the

submission of the Ban1e's fourth annual report to the United States" and that the "Court shall

retain jurisdiction for the duration of this Agreement to enforce the terms of the Agreement"

(Dkt. No. 5, ~~ 39, 43.) The Agreed Order further provides that, other than to extend time limits,

modifications "may be made only upon approval of the Court, by motion of either party" (Id. ~

40.) Accordingly, this Court has jurisdiction to grant the Parties' Joint Motion to Amend the

Agreed Order.

I All other changes in the Amended Agreed Order are technical changes, such as adding the date that the Agreed Order was originally entered by this Court, and changing the signature blocks, as necessary.
2

Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 3 of 6
II. The Parties Have Agreed to the Proposed Amendments to the Agreed Order Paragraph 40 of the Agreed Order states that the "parties recognize that there may be
changes in relevant and material factual, economic andlor financial circumstances during the term of this Agreement which may impact the accomplishment of its goals" and that the Parties "agree to work cooperatively to discuss and attempt to agree upon any proposed modifications to this Agreement resulting from any such change in circumstances." (Id. '40.) Prior to the entry of the Agreed Order, the Parties anticipated that FUSB would be able to exhaust the funds in the special financing program subsidy during the four-year term of the Agreed Order using the forms of financial assistance permitted in the Agreed Order. However, due to changed circumstances, including changes in Bank's relevant housing and mortgage market, FUSB has been unable to fully exhaust the funds. The Parties agree that it may be difficult for the Bank to fully exhaust the special financing program subsidy absent some changes.
Therefore, in accordance with paragraph 40 of the Agreed Order, the Parties have worked cooperatively to address these new circumstances and, as a result, have agreed to amend paragraph 30 of the Agreed Order to provide FUSB with additional opportunities to effectively utilize the balance of the special financing program, roughly 20% of the original amount designated for this use. Specifically, paragraph 30 of the Amended Agreed Order would allow FUSB to use the special financing program to provide the amount required to fund a qualified applicant's escrow acconnt at closing up to a certain amount in the form of a grant; to purchase interest free mortgage loans originated by a qualifying community organization that builds affordable housing for families in majority-black census tracts; to provide grant funds to qualifying community organizations for the establishment of "cash reserve repair fund" accounts; and to provide grants to qualifying community organizations for down payment assistance,
3

Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 4 of 6
closing cost assistance, and escrow accounts for qualified applicants. These additional forms of financial assistance may be offered to qualified applicants residing in the majority-black census tracts in the bank's lending area as defined in footnote 1 and Appendix A of the Amended Agreed Order. III. The Proposed Amendments Benefit Borrowers in Majority-Black Census Tracts
The additional forms of financial assistance permitted by the Amended Agreed Order are aimed at increasing housing-related, CRA small business and community development lending in the majority-black census tracts in the bank's lending area, while also enhancing FUSB's presence there by facilitating the establishment of traditional banking relationships and relationships with qualified community organizations in these areas. The new forms of financial assistance are based on FUSB officials' knowledge and familiarity with the bank's lending area. The Parties believe that in partnering with qualified community organizations, the Bank can better reach the individuals who are qualified for and would benefit most from the forms of financial assistance provided for in the Amended Agreed Order.
CONCLUSION For these reasons, the United States and First United Security Bank respectfully request that this Court grant the Parties' Joint Motion to Amend the Agreed Order and enter the proposed Amended Agreed Order for Resolution attached as Exhibit A to the Joint Motion to Amend the Agreed Order.
4

Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 5 of 6

Respectfully submitted on May 6, 2014. For First United Security Bank
David M. Smith (ASB- 55-S83D) John P. Dulin, Jr. Maynard, Cooper and Gale, P.C. 1901 6th Ave N # 2400 2400 Regions/Harbert Plaza Binningham, AL 352'03
(205) 254-1000 (205) 254·1999 (fax)
.s:llim,i th@l!E1Y!1!lUl£Q9.lltI" cOIn

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
~~
Jon M. Seward Deputy Chief Marta CanJpos Attorney U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530 mmta.campos@usdoj.gov
(202) 514.4733
(202) 514-1116 (fax)
Kenyon R. BrO","11 United States Attorney
'~C=~ Holly L. Wiseman (WIS H7352j
Special Assistant United States Attorney 63 Sonth Royal Street, S\lite 600 Mobile, Alabmna 36602 hol1y.wiseman@usdoi.gov
(251) 415·7104 ,
(251) 441·5051 (tax)

5

Case 1:09-cv-00644-WS-M Document 12-2 Filed 05/06/14 Page 6 of 6 CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 6th day of May 2014, the foregoing was electronically filed with the Clerk of the Conrt using the CMIECF system which will send notificatiori of such filing to all attorneys of record.
M~~~
Attorney U.S. Department of Justice
6

 
 Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 1 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

)

________D_ef_en_da_nt_. _________))

CIVIL ACTION NO. 1:09-cv-00644-WS-M

AMENDED AGREED ORDER FOR RESOLUTION I. INTRODUCTION

This Amended Agreed Order ("Agreement") is submitted jointly by the parties for

approval and entry by the Court to modify the Agreed Order that was submitted jointly by the parties simultaneously with the filing of the United States' Complaint in this action and approved

and entered by the Court on November 18, 2009. The Agreement resolves the claims of the United States that the defendant, First United

Security Bank ("FUSB" or "the Bank"), violated the Fair Housing Act ("FHA"), 42 U.S.C.

§§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-1691f, by engaging in a pattern or practice of racial discrimination in the setting of interest rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and by failing to serve the lending needs of majority African-American census tracts in west central Alabama on an equal basis with majority-white tracts.
Under the provisions of this Agreement, the Bank has implemented and will continue to implement policies and procedures to ensure that the pricing of its residential loan products is
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 2 of 26
done in a nondiscriminatory manner, consistent with the requirements of the FHA and ECOA, and will compensate certain African-American borrowers. Under the provisions of this Agreement, the Bank also will seek to improve its performance in meeting the credit needs of residents located in majority-minority1 census tracts and ensure that its loan products and lending services are available on an equal basis in all residential areas in its market area, regardless of racial composition.
The Bank denies any alleged violation of the FHA or the ECOA and maintains that at all times it conducted its lending in compliance with the letter and spirit of the fair lending laws and in a non-discriminatory manner. There has been no factual finding or adjudication with respect to any matter alleged by the United States. Accordingly, the. execution of this Agreement is not, and is not to be construed as, an admission or finding of any violation of the FHA or the ECOA by the Bank. Rather, both parties have entered into this Agreement to resolve voluntarily the claims asserted by the United States in order to avoid the costs, risks and burdens of litigation.
II. FAIR LENDING INITIATIVES I. Unless otherwise stated herein, the provisions of this Section II of the Agreement shall be implemented within forty five (45) days of the effective date of this Agreement and shall continue throughout its term. The effective date of this Agreement shall be the date on which it is approved and entered by the Court. A. General Nondiscrimination Injunction 2. The Bank, including all of its officers, employees, agents, representatives,
For purposes of this Agreement, the term "majority-black," "majority African-American" or "majority-minority" census tract is defined to mean a census tract whose population is more than 50% black. The majority-African-American census tracts are listed on Appendix A, based on the 2000 Census.
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 3 of 26
assignees and successors in interest, and all those in active concert or participation with any of them, is hereby enjoined from engaging in any act or practice which discriminates on the basis of race or color in any aspect of a residential real estate-related transaction in violation of the Fair Housing Act, 42 U.S.C. §§ 3604 and 3605, or in any aspect of a credit transaction in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 169l(a)(l).
3. FUSB shall ensure that the Banlc offers and provides all persons with an equal opportunity to apply for and obtain credit, regardless of the predominant race or color ofthe population of the area in which a person lives, or the area in which the property securing the loan or the small business is located.
B. Pricing Policy and Procedures 4. In early 2007, FUSB developed and implemented a pricing matrix for residential real estate-related loans based on credit scoring and other objective criteria. Under this pricing matrix, any variance from the published rate must be approved in writing in advance by both a regional manager and the Senior Lender, Chief Credit Officer or Chief Executive Officer of the Banlc. The Banlc shall continue utilizing this pricing matrix policy for residential real estate loans, and shall modify the policy to include: (i) limits on the amount by which the interest rate may deviate, either upward or downward, from the interest rate as determined by the matrix; (ii) the factors that a Bank official may consider in the exercise of that discretion; (iii) a requirement to include in each loan file written documentation of the factors set forth in the pricing matrix and, where the final interest rate varies from the published rate, the factors relied on in connection with an individual loan application and how those factors affected the pricing decision; and (iv) a requirement that loan officers inform applicants in writing before an interest
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 4 of 26

rate is fixed, that the interest rate is determined by taking into account a variety of factors and that the interest rate may be negotiable within the limits set by the loan policy. In addition, the policy shall require the Banlc to post and prominently display in each branch or office a notice of non-discrimination.
5. The Bank shall provide a copy of its revised loan pricing policy to counsel for the United States within thirty (30) days of the effective date of this Agreement.2 The United States shall have thirty (30) days from receipt ofthe loan pricing policy to raise any objections to it, and if it raises any, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. Until the Court resolves such a dispute, the revised loan pricing policy will not go into effect.
6. The Bank shall modify its loan review system for residential real-estate related loans in a manner designed to ensure compliance with the nondiscrimination requirements of the FHA, ECOA, and this Agreement. That system shall require a quarterly review by a committee comprised of the Bank's chief executive officer, senior lending officer, and chief credit officer of all residential real-estate related loans originated during the preceding quarter. Each such quarterly review shall be memorialized in writing, signed and dated by a designated member of the committee referenced above, and shall be provided to the Bank's senior executive officers and Board not later than thirty (30) days after the end of each quarter. Each review shall include, but not be limited to, a comparison and analysis of the terms and conditions, including the pricing, of all HMDA loans by the race of the borrowers. In the event that any such review

2

All material required by this Agreement to be sent to counsel for the United States shall be sent by

commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil

Rights Division, U.S. Depmtment of Justice, 1800 G Street NW, Washington, DC 20006, Attn: DJ 188-3-2, or by

facsimile to 202-514-1116.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 5 of 26
discloses disparities in the pricing of covered loans between African-American and white borrowers, the Bank shall promptly determine the reason(s) for those pricing disparities and shall promptly take any corrective action, if necessary, documenting both its determination and any remedial action. The Bank shall provide these quarterly reviews and all documentation relating thereto, including documentation of its reasons for taking or not taking corrective action, to the United States on a quarterly basis.
7. During the term of this Agreement, the Bank may change its loan pricing policy for residential real-estate loans upon written advance notice to the United States, which shall have thirty (30) days from receipt of such notice to raise any objection to the proposed change. If it raises any objection, the parties shall confer to resolve their differences. If they are unable to do so, either party may bring the dispute to this Court for resolution. The Bank shall not implement the change during such a dispute.
C. The Bank's Service Area 8. The Banlc shall talce all reasonable, practicable steps consistent with safety and soundness and this Agreement, to ensure that residential and CRA small business loan products are made available and marketed in majority African-American census tracts in the following Alabama counties: Bibb, Chilton, Choctaw, Clarke, Hale, Jefferson, Marengo, Monroe, Perry, Shelby, Sumter, Tuscaloosa, Washington, Wilcox counties (hereinafter "the majority African-American census tracts") on no less favorable a basis than in predominantly white areas. If the Bank chooses to talce any actions in addition to those specified below to achieve the goals of this Agreement, it shall provide written notice to the United States thirty (30) days prior to implementation of any such additional actions during the term of this Agreement.
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 6 of 26
Community Reinvestment Act Assessment Areas 9. In September 2008, the Bank revised its CRA assessment areas. In the Tuscaloosa MSA assessment area, the Bank added all of the majority-African-American tracts of Tuscaloosa County south of the Black Warrior River.3 The Bank will revise its South Alabama assessment area to include at least five (5) additional majority African-American census tracts. The Bank shall maintain the revised CRA assessment areas throughout the term of this Agreement. Nothing in this Agreement precludes the Bank from expanding its CRA assessment areas in the future in a manner consistent with the provisions of the CRA and its implementing regulations. 10. The Bank shall provide a copy of the new proposed South Alabama assessment area to counsel for the United States within ninety (90) days of the effective date of this Agreement. The United States shall have thirty (30) days from receipt of the proposed assessment area to raise any objections to it, and if it raises any, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. Until the Court resolves such a dispute, the proposed assessment area will not go into effect. Additional Branch Location and Services 11. FUSB 's residential and CRA small business lending has been generated primarily by the activities of loan officers based in branch offices. The Ban1c shall evaluate future opportunities for expansion, whether by acquisition or opening new offices, in a manner consistent with achieving the remedial goals of this Agreement.
The new proposed assessment areas are still subject to review and approval by the FDIC, as the Bank's regulator.
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12. The Bank shall make all reasonable efforts, subject to any and all required government and regulatory approvals, to acquire or open one (1) additional branch office located in one of the majority African-American census tracts within thirty-six (36) months of the date of entry of this Agreement. The new branch will provide the complete range of services typically offered at the Bank's branches within its existing assessment areas. These services encompass, but are not limited to: (a) the full range of residential lending services, including a full-time on-site residential lending officer, and (b) both comparable information about business lending options and comparable access to a business lending specialist.
13. Nothing in this Agreement precludes the Bank from opening or acquiring additional branch offices in the majority African-American census tracts or elsewhere. Nor does any provision of this Agreement require the Bank to consult with the United States regarding its opening or acquisition of any other branches or offices except as required by law.
14. As soon as practicable in light of the current economic and bank regulatory environment, the Bank shall present a proposal for the new branch to the United States for its review and approval, which shall not be unreasonably withheld, no later than eighteen (18) months after the date of entry of this Agreement. Once approved by the United States, where necessary, the Bank shall act as quickly as possible to obtain any required local or state governmental permits and approvals and to seek the approval of its federal regulator, currently the Federal Deposit Insurance Corporation.
Advertising and Outreach 15. The Bank shall spend a minimum of one hundred and ten thousand dollars ($11 0,000) on the targeted advertising and marketing campaign described in paragraphs (a)-(d)
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 8 of 26

below over the term ofthis Agreement. This program shall be specifically targeted to generate applications for all types of its credit products from qualified residents and small businesses in the majority African-American census tracts. This program shall include, at a minimum, the following components:
(a) Print Media. During each year of this Agreement, in addition to any other print advertising, the Bank shall advertise in at least one print medium specifically directed to AfricanAmerican readers. 4 These advertisements, viewed in their entirety over the course of a year, shall include the Bank's full range of principal credit products, including any special products or services made available as part of this Agreement. The Bank retains the discretion to determine the size, content, and frequency of such advertising, subject to the standards set forth above.
(b) Radio. During each year of this Agreement, the Bank shall place radio advertisements on at least one (I) radio station whose programming is oriented toward AfricanAmerican listeners. The radio advertising, viewed in its entirety over the course of a year, shall include the Bank's full range of principal loan products, including any special products or services made available under this Agreement. The Bank retains the discretion to determine the content and frequency of such radio spots subject to the standards set forth above and to place such advertising on additional minority-oriented stations.
(c) Promotional Materials. The Bank shall create point-of-distribution materials, such as posters and brochures, targeted toward the majority African-American census tracts to advertise products and services it offers, including any special loan products or services made available pursuant to this Agreement. The Banlc shall place or display these promotional

4

The Birmingham Times and the Birmingham Weekly are two such outlets.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 9 of 26
materials in its branch offices and additional, appropriate distribution locations throughout the majority African-American census tracts, including but not limited to, community centers and supermarkets and other commercial establishments.
(d) Direct Mailings. The Bank also shall utilize direct mailing to advertise the loan program required by this Agreement to residents and small businesses throughout the majority African-American census tracts. These direct mailings shall not be targeted exclusively or primarily at existing customers.
(e) All of the Bank's print advertising and promotional materials shall contain an equal housing opportunity logotype, slogan, or statement. All of the Bank's radio and television advertisements shall include the audible statement "Equal Opportunity Lender."
Credit Needs Assessment 16. Within three (3) months of the entry of this Agreement, the Bank shall begin an assessment of the residential real estate-related and small business credit needs of the majority African-American census tracts. This assessment shall include, but not be limited to: (a) analysis of the most recent available demographic and socioeconomic data about those census tracts; (b) evaluation of the residential and small business credit needs of and corresponding lending opportunities in the majority African-American census tracts; (c) consideration of how the Bank's residential and small business lending operations can serve the goals of this Agreement; and (d) thorough review of the availability of relevant federal, state, and local governmental programs and evaluation of how participation in each of them would assist in achieving the goals ofthis Agreement. The assessment shall focus particularly on identifying effective ways to provide lending services in the majority African-American census tracts where FUSB does not
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 10 of 26
have a branch office. The Bank may retain outside parties to provide expert analysis and assistance in performing this assessment.
17. In accomplishing this assessment, Bank representatives shall also meet with representatives of at least three (3) area community organizations located throughout southwest and west central Alabama significantly involved in promoting fair lending, home ownership, or residential or small business development in the majority African-American census tracts. The Bank may also meet with representatives of any other appropriate entities in conducting this needs assessment.
18. The Bank shall present to counsel for the United States a written report of this special credit needs assessment, together with recommendations, if any, for actions beyond those specified in this Agreement to be taken to meet those needs, not later than six (6) months after the entry of this Agreement.
19. For the term of this Agreement, the Bank shall meet armually with community organizations servicing the majority African-American census tracts as part of an ongoing credit needs assessment and evaluation of its business plan, in order to better meet the residential and small business credit needs of the residents and small businesses in the majority African-American census tracts.
Consumer Education 20. The parties acknowledge that financially educated consumers are essential to increasing the Bank's residential and small business lending in majority African-American census tracts. To help identify and develop qualified loan applicants from the majority African-American census tracts, the Bank shall host, co-host or sponsor at least four (4) sessions
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 11 of 26
per every twelve (12) months during the term of this Agreement to provide credit counseling, financial literacy, business planning, and other related educational programs targeted at the residents and small businesses in these areas. The Bank will consult with community organizations and fair housing groups to determine the most effective way of providing consumer education. The Bank shall invest sufficient funds to effectively support the activities described in this paragraph 20.
D. Staff 21. For the duration of this Agreement, FUSB shall employ or designate a Director of Community Lending (or similar title), whose primary responsibilities will include ensuring the Bank's compliance with the FHA, ECOA and the provisions of this Agreement. If the Bank designates a Director from within the Bank, the DOJ shall be notified and provided an opportunity to review the qualifications of this individual in advance. The Director will supervise the activities of loan officers regarding the solicitation and origination of loans in majority African-American census tracts, including the special' loan programs identified in this Agreement; coordinate the Bank's involvement in community lending initiatives and outreach programs; serve as a resource to lending staffto encourage and develop lending in majority African-American census tracts; ensure the training of the staff at all branch offices (both existing and new) in all aspects of the Bank's lending processes; and report directly to the Bank's Board of Directors on the progress ofthese initiatives at least quarterly, including recommending changes in these programs to increase their effectiveness. 22. Within sixty (60) days after the Bank's revised loan pricing policy is approved by the United States or the Court, pursuant to paragraphs 4-5, FUSB shall provide equal credit
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 12 of 26
opportunity training to its management officials, loan officers, and any other employees, or agents who: (a) participate in the pricing of residential real-estate loans, or (b) have significant involvement in any aspect ofresidential or CRA small business lending ("covered employees"). During this training, the Bank shall provide to each participant: (i) a copy of this Agreement and the Bank's revised loan pricing policy; and (ii) training on the terms of this Agreement, the new loan pricing policy, the requirements of the FHA, ECOA and the Community Reinvestment Act, and his or her responsibilities under each. The training required by this paragraph shall be conducted by an independent qualified third party (at the Bank's expense) approved in advance by the United States. The Bank shall notify the United States in writing at least forty five (45) days in advance of the proposed training of the identity of the person or organization who will conduct the training. The United States shall have thirty (30) days from receipt of such notification to raise any objections. Ifthe United States timely objects, the parties shall confer to resolve their differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution.
23. The Bank shall secure from each covered employee a signed statement acknowledging that he or she has received a copy of this Agreement and the loan pricing policy and has completed the initial equal credit opportunity training. These statements shall be substantially in the form of Appendix B (Acknowledgment) and Appendix C (Equal Credit Opportunity Training). During the term of the Agreement, each new covered employee shall be provided a copy of this Agreement and given an opportunity to have any questions answered, and shall sign the aclmowledgment form statement (Appendix B) within ten (10) days of begiuning his or her employment in that position.
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 13 of 26
24. During the term of this Agreement, FUSB shall continue its practice of providing annual equal credit opportunity training to covered employees with respect to their responsibilities and obligations under the FHA and the ECOA.
E. Monetary Provisions 25. FUSB shall deposit in an interest-bearing escrow account the total sum of fifty thousand dollars ($50,000) for the purpose of paying damages to any "aggrieved person," defined herein as an African-American borrower of a conventional, first-lien refinance loan for an owner-occupied, one-to-fourfamily property who, between January 1, 2004 and December 31, 2004, may have been charged a higher interest rate by the Bank than a comparable white borrower (the "Settlement Fund"). The Bank shall provide written verification ofthe deposit to the United States within five (5) days ofthe effective date of this Agreement. Any interest that accrues shall become part of the Settlement Fund and be utilized as set forth herein. 26. The United States has identified the aggrieved persons who are eligible for compensation under this Agreement. The United States shall, upon reasonable notice, be allowed access to the Bank's records and files to verify the accuracy of the data in the possession of the United States and to otherwise identify aggrieved persons entitled to the payments from the Settlement Fund. 27. Within forty five (45) days of the effective date of this Agreement, the United States shall provide to the Bank a list of the aggrieved persons and an amount it believes each individual shall receive from the Settlement Fund determined by a methodology agreed to by the parties, subject to the conditions set forth in paragraph 29 below (the "Payment List"). The Bank shall have thirty (30) days to review the Payment List and provide comments thereon to the
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 14 of 26
United States. The United States shall consider in good faith any snch comments within thirty (30) days of receipt and shall confer with the Bank within such timeframe to resolve any differences. In the event they are unable to do so, either party may bring the dispute to this Court for resolution. No payment from the Settlement Fund may occur until the process described above in this paragraph has been completed and the Payment List has been finalized either by agreement of the parties or by this Court.
28. Within thirty (30) days of the date on which the Payment List is finalized in accordance with the process provided for in paragraph 27 above, the United States shall notify the aggrieved persons. Thereafter, the United States shall provide counsel for FUSB with all executed releases that it receives. Within ten (10) days of the receipt of the Releases, the Bank shall issue checks, drawn on the Settlement Fund, and mail the checks to those aggrieved persons who have executed and returned the Releases within ninety (90) days of receipt of the notification from the United States. The Bank shall provide a copy of each check to the United States. In the event that less than the total amount in the Settlement Fund, including accrued interest, is distributed to aggrieved persons, the remainder shall be returned to the Bank and shall no longer be subject to claims by any aggrieved persons.
29. Payments from the Settlement Fund to aggrieved persons shall be subject to the following conditions:
(a) No aggrieved person shall be paid any amount from the Settlement Fund until after the execution of a written release of all claims, legal or equitable, which he or she might have against the Bank regarding the claims asserted by the United States in this lawsuit, so long as such claims accrued prior to the entry of this Agreement. The form of the release is set forth
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 15 of 26

in Appendix D; and (b) The total amount to be paid by the Bank to the aggrieved persons shall not exceed
fifty thousand dollars ($50,000), plus the interest that has accrued on the Settlement Fund. 30. In addition to the monetary commitments detailed above, FUSB will invest a
minimum of five hundred thousand dollars ($500,000) over the duration of this Agreement in a special financing program for residential and CRA small business and community development loans5, which is described below.6 Through this special financing program, the Bank will offer every qualified customer, whether an individual or business (for CRA small business and community development loans), in the majority African-American census tracts, loan products at interest rates and/or on terms that are more advantageous to the applicant than it would normally provide. Specifically, the Bank may-provide one or more of the following forms of financial assistance to any qualified applicant, to be provided directly by FUSB under paragraphs (a), (b) and (f), and either directly by FUSB and/or through a grant made to a qualifying community organization7 under paragraphs (c), (d), (e) and (g):
(a) a HMDA-reportable loan (including without limitation a loan for home purchase, refinancing, or home improvement), a CRA small business loan and/or a community

In this Agreement, community development loans are defmed as those which meet the definition set forth in Federal Reserve Board Regulation BB, 12 CFR 228.12(h).

6

With respect to the Bank's home mortgage subsidy program, no loan originated under this program shall

exceed the then-conforming loan limit applicable to Fannie Mae and Freddie Mac, as determined by the Federal

Housing Finance Board.

7

A qualifying community organization is defined as a non-profit organization that has among its goals the

furtherance in majority-black census tracts of affordable and/or fair housing or CRA small business or community

development loans. Such organizations will be selected by FUSB and approved by the United States, FUSB shall

include in the annual report it submits to the United States under paragraph 37 of this Agreement a detailed

description ofhow each organization that received a subsidy or grant under paragraph 30 of this Agreement used

such funds each year, including the total funds received from each subsidy or grant, each amount used, the date the

funds were used, and for what purpose.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 16 of 26

development loan at an interest rate a minimum rate of 'l2 of a percentage point (50 basis points) below the otherwise prevailing rate, provided that if the prevailing rate for any such loan exceeds I0% at any time during the term of this Agreement the interest rate subsidy shall be a minimum of I%, and if the prevailing rate exceeds 12% at any time during the term of this Agreement, the subsidy shall be a minimum of 1.5%;8
(b) a loan at a lower interest rate to a borrower who would ordinarily not qualify for such rate for reasons including, for example, the lack of required credit quality, income, or down payment;9
(c) a direct grant of a minimum of2% of the loan amount, up to a maximum of3%, for the purpose of down payment assistance;
(d) closing cost assistance in the form of (i) a direct grant of a minimum of $500 and a maximum of$1,000 or (ii) a waiver of costs in an amount between 2 and 3% of the loan amount, except for loans under the USDA Guaranteed Loan Program, as to which a 1% fee waiver satisfies this provision;
(e) providing the amount required to fund a qualified applicant's escrow account at closing, up to $3,500, in the form of a grant;

For purposes of this Agreement, the loan subsidy amount calculation will be (a) the reduction in the monthly payment from the standard fully-amortized monthly payment based on the borrower's qualifications which results fi·om the interest rate reduction the borrower receives times (b) the number of monthly payments for the time periods as set forth below for various loan types:
(i) HMDA loans at 39.3 months; (ii) Small business loans at 15 months; and (iii) Community development loans at the term of the note. If during the term of this Agreement, the Bank materially modifies the term of its HMDA or CRA small business loan products, then the parties will work together in good faith to equitably modify the time periods in (i) or (ii) above, as the case may be. If they are unable to reach agreement, either party may bring the dispute to this Court for resolution. The Bank shall not implement the change during such a dispute.

9

Footnote no. 8 above is incorporated by reference.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 17 of 26

(f) purchasing interest free mortgage loans originated by a qualifying community organization that builds affordable housing for families in majority-black census tracts who are in need of shelter, or originating mortgage loans to borrowers under a special purpose credit program to purchase homes built by such a qualifying community organization; or
(g) providing grant funds to qualifying community organizations for the establishment of "cash reserve repair fund" accounts. These pre-paid savings accounts will be opened at FUSB by the qualifying community organization for the benefit of the homeowner and, subject to approval by the qualifying community organization administering the account, may be used for home repair and maintenance expenses or if a qualifying life emergency10 prevents the homeowner from making his or her mortgage payments. The homeowner will receive up to $3,500 in the pre-paid savings account and the qualifying community organization will receive a $500 administrative fee from the grant funds provided by FUSB, for a total grant of up to $4,000 per homeowner. The term of these accounts is three years, after which time any remaining money will be transferred to the homeowner. In addition, either FUSB or the qualifying community organization will provide the homeowner with information describing checking and savings accounts at FUSB. If the homeowner so chooses, the homeowner may open a type of account offered at FUSB in the homeowner's name.
31. The Bank retains the discretion to offer more than one, or all, of the foregoing forms of financial assistance to qualified applicants on an individual basis as it deems appropriate under the unique factual circumstances of a particular application. The Bank will

\0

A qualifying life emergency includes, but is not limited to, unexpected health expenses, automobile repairs,

home repairs, temporary unemployment or other expenses or emergencies approved by the non-profit organization

or qualifying community organization that temporarily impairs a homeowner's ability to make mortgage payments.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 18 of 26
exercise this discretion in a manner which maximizes the likelihood that it will originate a loan to a qualified applicant, consistent with applicable underwriting guidelines, loan policies, rules and regulations, and safety and soundness standards.
32. The Bank shall have discretion to apportion, as it sees fit, the special financing program's loan subsidy among its residential and CRA small business and community development loan products. However, the Bank shall use commercially reasonable efforts to implement the program such that, of the total dollar volume ofloans subsidized each year, at least 50% are CRA small business and/or community development loans.
33. The Bank shall make reasonable efforts to promote an equitable distribution of these investment funds widely among the majority African-American census tracts.
34. No provision of this Agreement, including this special financing program commitment, requires the Bank to make any unsafe or unsound loan. During the term of this Agreement, the Bank shall assess the effectiveness of this special financing program in achieving the Agreement's goals and shall recommend to the United States any changes it reasonably believes are necessary and appropriate to increase the program's effectiveness.
III. EVALUATING AND MONITORING COMPLIANCE 35. For the duration of this Agreement, FUSB shall retain all records relating to its obligations hereunder, including its residential and small business lending activities, as well as its advertising, outreach, special programs, and other compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request. 36. Each year for the duration of this Agreement, the Bank shall provide to counsel for the United States the data it submits to the Federal Financial Institutions Examination
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 19 of 26
Council (FFIEC) pursuant to the Home Mortgage Disclosure Act and the Community Reinvestment Act. Such data, including the record layout, will be provided in the same format in which it is presented to the FFIEC within thirty (30) days of its submission to the FFIEC.
37. Each year for the duration of this Agreement, in addition to the submission of any other plans or reports specified in this Agreement, FUSB shall make an annual report to the United States on its progress in fulfilling the goals of this Agreement. Each such report shall provide a complete account of the Bank's actions to comply with each requirement of this Agreement during the previous year, an objective assessment of the extent to which each quantifiable obligation was met, an explanation of why any particular component fell short of meeting its goal for that year, and any recommendations for additional actions to achieve the goals of this Agreement. The Bank shall submit this report each year for the term of this Agreement within forty-five (45) days of the anniversary of the date of the entry of this Agreement. In addition, the Bank shall attach to the annual reports representative copies of training material and advertising and marketing materials disseminated pursuant to this Agreement.
38. This Agreement shall be binding on the Bank, including all its officers, employees, agents, representatives, assignees, and successors in interest, and all those in active concert or participation with any of them. In the event the Bank seeks to transfer or assign all or part of its operations, and the successor or assign intends on carrying on the same or similar use, as a condition of sale, the Bank shall obtain the written accession of the successor or assign to any obligations remaining under this Agreement for the remaining term of this Agreement.
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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 20 of 26

IV. ADMINISTRATION 39. The Agreement shall terminate (a) three (3) months after the submission of the Bank's fourth annual report to the United States (the "Termination Date"); (b) if the Court grants a joint motion by the parties to terminate the Agreement prior to that date, which motion may be proposed by the Bank at any time after the Agreement has been in effect for three (3) years, if the Bank has fully complied with all its terms; 11 or (c) if the Bank has not invested $500,000 in its special financing program in four (4) years from the date of entry of this Agreement, three months after the submission of the Bank's final annual report to the United States, which shall be submitted after completing the investment required by the special financing program. It shall only be extended upon written agreement of the parties or, upon motion of the United States to the Court, for good cause shown. 40. Any time limits for performance fixed by this Agreement may be extended by mutual written agreement of the parties. Other modifications to this Agreement may be made only upon approval of the Court, by motion of either party. The parties recognize that there may be changes in relevant and material factual, economic and/or financial circumstances during the term of this Agreement which may impact the accomplishment of its goals. The parties agree to work cooperatively to discuss and attempt to agree upon any proposed modifications to this Agreement resulting from any such change in circumstances. 41. In the event that any disputes arise about the interpretation of or compliance with the terms ofthis Agreement, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to this Court for resolution. The United States agrees that

II

The United States shall not refuse to join the Bank's motion if it concludes that the Bank has fully complied

. with all the provisions of this Agreement.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 21 of 26

if it reasonably believes that the Bank has violated any provision of this Agreement, it will

provide the Bank written notice thereof and give it thirty (30) days to resolve the alleged

violation before presenting the matter to _this Court. In the event of either a failure by the Bank

to perform in a timely manner any act required by this Agreement or an act by the Bank in

violation of any provision hereof, the United States may move this Court to impose any remedy

authorized by law or equity, including attorneys' fees and costs.

42. FUSB's compliance with the terms of this Agreement shall fully and finally

resolve all claims of the United States arising prior to the effective date of this Agreement and

relating to the Bank's alleged violation of the fair lending laws by means of discriminating on the

basis of race or color, including without limitation all claims for equitable relief and monetary

damages and penalties. Each party to this Agreement shall bear its own costs and attorney's fees

associated with this litigation.

43. The Court shall retain jurisdiction for the duration of this Agreement to enforce

the terms of the Agreement, after which time the case shall be dismissed with prejudice.

1 SO ORDERED, this -~d~ay of '1\/\A'.tI

, 2014.

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 22 of 26

The undersigned hcl'eby apply for and consent to the entry of this Agreement:

For First United Security Bank
#~#-
David M. Smith (ASB-0455-S83D) John P. Dulin, Jr. Maynard, Cooper and Gale, .P.C. 1901 6th Ave N # 2400 2400 Regions/Harbert Plaza Birmingham, AL 35203 (205) 254-1000 (205) 254-1999 (fax)
rLlJLni t!J.@.Dl>lvnacd c ooner. com

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
Deputy Chief Marta Campos Attomey U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 l'e1111sylvania Avem1e, N. W. Washington, D.C. 20530
matta.can10os~llusdoj.gov
(202) 514-4733 (202) 514-1116 (fax)

Kenyen R. Bro:wn United States Attomey

~~k--
Holly L. Wiseman (WISE 352) Special Assistant United States Attomey 63 South Royal Street, Suite 600 Mobile, Alabama 36602 holly.wiseman@usdoj .gov (251) 415-7104
(251) 441-5051 (fax)

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 23 of 26

APPENDIX A Majority Black Census Tracts
Source: 2000 Census

1 Tract 9567 Choctaw 2 Tract 9580 Clarke 3 Tract 40 I Hale 4 Tract 403 Hale 5 Tract 404 Hale 6 Tract 405 Hale 7 Tract 1 Jefferson 8 Tract 3 Jefferson 9 Tract 4 Jefferson 10 Tract 5 Jefferson 11 Tract 7 Jefferson 12 Tract 8 Jefferson 13 Tract II Jefferson 14 Tract 12 Jefferson 15 Tract 14 Jefferson 16 Tract 15 Jefferson 17 Tract 16 Jefferson 18 Tract 19.02 Jefferson 19 Tract 20 Jefferson 20 Tract 21 Jefferson 21 Tract 22 Jefferson 22 Tract 23.03 Jefferson 23 Tract 24 Jefferson 24 Tract 27 Jefferson 25 Tract 29 Jefferson 26 Tract 30.01 Jefferson 27 Tract 30.02 Jefferson 28 Tract 31 Jefferson 29 Tract 32 Jefferson 30 Tract 33 Jefferson 31 Tract 34 Jefferson 32 Tract 35 Jefferson 33 Tract 36 Jefferson 34 Tract 37 Jefferson 35 Tract 38.02 Jefferson 36 Tract 38.03 Jefferson 37 Tract 39 Jefferson 38 Tract 40 Jefferson 39 Tract 42 Jefferson

40 Tract 45 Jefferson 41 Tract 51.0 1 Jefferson 42 Tract 51.02 Jefferson 43 Tract 52 Jefferson 44 Tract 55 Jefferson 45 Tract 57.01 Jefferson 46 Tract 57.02 Jefferson 47 Tract 58 Jefferson 48 Tract 59.06 Jefferson 49 Tract 101 Jefferson 50 Tract 102 Jefferson 51 Tract 103.01 Jefferson 52 Tract 103.02 Jefferson 53 Tract 104.01 Jefferson 54 Tract 105 Jefferson 55 Tract I 06.02 Jefferson 56 Tract 106.03 Jefferson 57 Tract 119.02 Jefferson 58 Tract 119.03 Jefferson 59 Tract 124.01 Jefferson 60 Tract 130.02 Jefferson 61 Tract 131 Jefferson 62 Tract.l3 2 Jefferson 63 Tract 13 3 Jefferson 64 Tract 134 Jefferson 65 Tract 136.01 Jefferson 66 Tract 138.01 Jefferson 67 Tract 139.01 Jefferson 68 Tract 141.05 Jefferson 69 Tract 9829 Marengo 70 Tract 9831 Marengo 71 Tract 9832 Marengo 72 Tract 9856 Monroe 73 Tract 9857 Momoe 74 Tract 9858 Monroe 75 Tract 9870 Perry 76 Tract 9871 Perry 77 Tract 9872 Perry 78 Tract 9911 Sumter
-23-

79 Tract 9912 Sumter 80 Tract 9913 Sumter 81 Tract 9915 Sumter 82 Tract 9916 Sumter 83 Tract I 04.04 Tuscaloosa 84 Tract 105 Tuscaloosa 85 Tract 116 Tuscaloosa 86 Tract 117.01 Tuscaloosa 87 Tract 117.03 Tusc!!loosa 88 Tract 118 Tuscaloosa 89 Tract 119 Tuscaloosa 90 Tract 123.04 Tuscaloosa 91 Tract 124.04 Tuscaloosa 92 Tract 124.05 Tuscaloosa 93 Tract 125.01 Tuscaloosa 94 Tract 128 Tuscaloosa 95 Tract 9947 Wilcox 96 Tract 9948 Wilcox 97 Tract 9949 Wilcox 98 Tract 9950 Wilcox 99 Tract 9951 Wilcox 100 Tract 9570 Choctaw I0 I Tract 9860 Momoe

Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 24 of 26

APPENDIXB Employee Acknowledgment

I acknowledge that on

, 2009, I was provided copies of the Agreed

Order for Resolution entered by the Court in United Statesv. First United Security Bank, (S.D.

Ala.), and the loan pricing policy developed pursuant thereto. I have read and understand these

documents and have had my questions about these documents answered. I understand my legal

responsibilities and shall comply with those responsibilities.

Signature Print Name Job Title Date

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 25 of 26

APPENDIXC Employee Training Certification

I certify that on

, 2009, I received training with respect to my

responsibilities under the Agreed Order for Resolution entered by the Court in United States v.

First United Security Bank, (S.D. Ala.), and the federal fair lending laws. I have had the

opportunity to have my questions about them answered. I understand my legal responsibilities

not to discriminate under the federal fair lending laws, including the Equal Credit Opportunity

Act and the Fair Housing Act, and shall comply with those responsibilities.

Signature Print Name Job Title Date

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Case 1:09-cv-00644-WS-M Document 14 Filed 05/07/14 Page 26 of 26

APPENDIXD

Release

In consideration for the parties' agreement to the terms of the Agreed Order for

Resolution entered in United States v. First United Security Bank, (S.D. Ala.), and the Bank's

payment to me of $

, pursuant to the Agreed Order for Resolution, I hereby release

and forever discharge all claims related to the facts at issue in the litigation referenced above, or

in any way related to that litigation, and any other claims arising from the housing and credit

discrimination alleged in that litigation up to and including the date of execution of this release,

that I may have against the Defendant, First United Security Bank, all related entities, parents,

predecessors, successors, subsidiaries, and affiliates, and all of their past and present directors,

officers, agents, managers, supervisors, shareholders and employees and their heirs, executors,

administrators, successors or assigns.

Executed this_ day of _ _ _ _ _, 2009.

Signature Print Name
Address

-26-

 
 Case 1:09-cv-00644-WS-M Document 10 Filed 03/28/14 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

CIVIL ACTION NO.

)

1:09-cv-00644-WS-M

v.

)

)

FIRST UNITED SECURITY BANK,

)

)

Defendant.

)

JOINT STATUS REPORT I. INTRODUCTION
In response to the Court's order of March 26, 2013, the parties submit this joint notice to report on the status of the implementation of the settlement terms, as set for in the Agreed Order for Resolution ("Agreement"), entered by the Court on November 18, 2009. The Agreement resolved the claims of the United States that the defendant, First United Security Bank ("FUSB" or "the Banlc"), violated the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-1691f, by engaging in a pattern or practice of racial discrimination in the setting of interest rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and by failing to serve the lending needs of majority African-American census tracts in west central Alabama on an equal basis with majority-white tracts.
The parties have worked cooperatively to ensure the smooth and full implementation of the various aspects of the Agreement. To date, the Bank has complied in full with the various parts of the Agreement with two exceptions. Those are:
1

Case 1:09-cv-00644-WS-M Document 10 Filed 03/28/14 Page 2 of 5
1. Part II C, Additional Branch Location and Services, paragraph 12, of the Fair Lending Initiatives section of the Order, and
2. Part II E, Special Financing Program, paragraph 30, of the Fair Lending Initiatives section of the Order.
By mutual consent of the parties, and pursuant to paragraph 40 of the Agreement, the expiration ofthe term of the Agreement has been extended to October 15, 2014. Additional Branch Location and Services
Under the terms of the Agreement, the Bank committed to malce reasonable efforts to acquire or open an additional branch in an area defined by the Agreement as previouslyunderserved. To date, the Bank has made reasonable efforts to open such a branch, without success, and has made contemporaneous reports of all efforts to the United States. Currently the Bank continues to talce steps to fulfill this commitment, and the parties are consulting with the Bank's regulator to ensure regulatory approval for the opening of a branch. The parties expect to have more firm information by early summer 2014. Special Financing Program Under the terms of the Agreement, the Bank also committed to invest a minimum of five hundred thousand dollars ($500,000) over the duration ofthis Agreement in a special financing program for residential and CRA small business and community development loans. To date, the Bank has made vast progress in distributing the fund through the origination of these loans. However, despite the Bank's reasonable efforts, the program funds have not been fully exhausted, a requirement for the termination of the Agreement. Accordingly, and under the provisions of paragraph 34 of the Agreement, the Bank is assessing other ways in which to
2

Case 1:09-cv-00644-WS-M Document 10 Filed 03/28/14 Page 3 of 5 expend those funds and is consulting with the United States on the proposed changes. Once the parties reach an agreement on any changes necessary to increase the program's effectiveness, the parties will submit for the Court's approval a motion and amended proposed Agreement. The parties expect to submit any proposed changes for the Court's approval within 45 days of this filing.
3

Case 1:09-cv-00644-WS-M Document 10 Filed 03/28/14 Page 4 of 5

Respectfully submitted on March 28, 2014,

For First United Secmity Bank

For the United Stales

012..//f&-

Steven H. Rosenbaum
Chief
~~- Housing and Civil Enforcement Section

John P. Dulin, Jr.

Deputy Chief

Maynard, Cooper and Gale, P.C.

Mat'ta Campos

190 I 6th Ave N # 2400 .

Attorney

2400 Regions/Harbet'l Plaza

U.S. Department of Justice

Birmingham, AL 35203

Civil Rights Division

(205) 254·1 000

Housing and Civi I Ertforcement Section

(205) 254-1999 (fax)

950 Pennsylvania Avenue, N.W.

.9J.1n ith.@)l)l,\\X!'a1;d cl?O p~ r1~()!;(\ .................................W.~s)!_\~gl())l1. p:.q:.;29.5.3.9....: ................

, ...

mmta.crunpos@usdoj.gov

(202) 514-4733

(202) 514-1116 (fax)

Kenyen R. Brown United States Attorney

_..-

4

Case 1:09-cv-00644-WS-M Document 10 Filed 03/28/14 Page 5 of 5

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 28th day of March 2014, the foregoing was electronically filed with the Clerk ofthe Court using the CM/ECF system which will send notification of such filing to all attorneys of record.

Marta Campos

/

Attorney

U.S. Department of Justice

Civil Rights Division

Housing & Civil Enforcement Section

5

 
 Case 1:09-cv-00644-WS-M Document 17 Filed 04/09/15 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

nlk/a FIRST US Bank,

)

)

Defendant.

)

_____________________________)

CIVIL ACTION NO. 1:09-cv-00644-WS-M

JOINT STATUS REPORT I. INTRODUCTION
In response to the Court's order of September 29, 2014, the parties submit this joint notice to report on the status of the implementation of the settlement terms, as set forth in the Amended Agreed Order for Resolution ("Amended Agreement"), entered by the Court on May 7, 2014. The Amended Agreement resolved the claims of the United States that the defendant, First United Security Bank, now known as First US Bank1 ("FUSB" or "the Bank"), violated the

Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-169lf, by engaging in a pattern or practice of racial

discrimination in the setting of interest rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and by failing to serve the lending needs of majority African-American census tracts in west central Alabama on an equal basis with majority-white

tracts. The parties continue to work cooperatively to ensure the smooth and full implementation
of the various aspects of the Amended Agreement. To date, the Bank has complied in full with
1 After obtaining required approvals, FUSB changed its name to First US Bank on December 15, 2014.

Case 1:09-cv-00644-WS-M Document 17 Filed 04/09/15 Page 2 of 5
the various parts of the Amended Agreement and, with two exceptions, satisfied all of its commitments thereunder. Those two exceptions are:
1. Part II C, Additional Branch Location and Services, paragraph 12, of the Fair Lending Initiatives section of the Order, and
2. Part II E, Special Financing Program, paragraph 30, ofthe Fair Lending Initiatives section of the Order.
By mutual consent of the parties, and pursuant to paragraph 40 of the Amended Agreement, the expiration of the term of the Amended Agreement has been extended to December 15,2015. Additional Branch Location and Services
Under the terms ofthe Amended Agreement, the Bank committed to make reasonable efforts to acquire or open an additional branch in an area defined by the Amended Agreement as majority-minority. To date, the Bank has received all relevant permits and approvals to open a branch at the location it purchased at 2619 and 2621 University Boulevard, Tuscaloosa, Alabama, 35401 , which is located in one of the census tracts identified in Appendix A of the Amended Agreement.
In order for the branch to be operational, the bank is undergoing some construction work to prepare the space before it can open for business. Construction work began on January 20, 2015 and the bank expects the site to be open for business on or about October 15,2015.
2

Case 1:09-cv-00644-WS-M Document 17 Filed 04/09/15 Page 3 of 5 Special Financing Program
Under the terms of the original Agreement, the Bank also committed to invest a minimum offive hundred thousand dollars ($500,000) over the duration of the Agreement in a special financing program for residential and CRA small business and community development loans. The parties later agreed, and the Court approved, an expanded list of approved ways in which the bank could disburse the funds in the special financing program. The Bank has made vast progress in distributing the fund through the origination of these loans and only 7.8% of the fund remains to be disbursed. However, despite the Bank' s best and consistent efforts, the program funds have not been fully exhausted, a requirement for the termination of the Amended Agreement.
In the event the Bank' s obligations in the Amended Agreement pertaining to the additional branch and the special discount fund are satisfied before December 15, 2015, the parties will move this Court for an early termination of the term of the Amended Agreement.
3

Case 1:09-cv-00644-WS-M Document 17 Filed 04/09/15 Page 4 of 5

Respectfully submitted on April 9, 2015,
David M. Smith (ASB-0455-S83D) Jolm P. Dulin, Jr. Maynard, Cooper and Gale, P.C. 1901 6th Ave N # 2400 2400 Regions/Harbert Plaza Birmingham, AL 35203 (205) 254-1000 (205) 254-1999 (fax) dsmith@maynal'dcooper.com

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
Jon1!!!:~
Deputy Chief Marta Campos Attomey U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530 matta.campos@usdoj .gov (202) 514-4733 (202) 514-1116 (fax)
Kenyen R. Brown United States Attorney
H~m:fttEtft;;;
Assistant United States Attorney 63 South Royal Street, Suite 600 Mobile, Alabama 36602 holly.wiseman@usdoj .gov (251) 415-7104 (251) 441-5051 (fax)

4

Case 1:09-cv-00644-WS-M Document 17 Filed 04/09/15 Page 5 of 5 CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 9th day of April2015, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all attorneys of record.
Me~
Attorney U.S. Department of Justice Civil Rights Division Housing & Civil Enforcement Section
5

 
 Case 1:09-cv-00644-WS-M Document 19 Filed 12/07/15 Page 1 of 4

IN THE UNITED STATES DISTRJCT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERJCA,

)

)

Plaintiff,

)

CIVIL ACTION NO.

)

1:09-cv-006.44-WS-M

v.

)

)

FIRST UNITED SECURITY BANK,

)

n/k/a FIRST US Bank,

)

)

Defendant.

)

JOINT STATUS REPORT I. INTRODUCTION
In response to the Court's order ofApril 13, 2015, the parties submit this joint notice to report on the status of the implementation of the settlement tetms, as set forth in the Amended Agreed Order for Resolution ("Amended Agreement"), entered by the Court on May 7, 2014. The Amended Agreement resolved the claims of the United States that the defendant, First United Security Bank, now known as First US Bank1 ("FUSB" or "the Bank"), violated the Fair Housing Act ("FHA"), 42 U.S. C. §§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-1691f, by engaging in a pattem or practice of racial discrimination in the setting of interest rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and by failing to serve the lending needs of majority African-American census tracts in west central Alabama on an equal basis with majority-white tracts.
The parties continue to work cooperatively to ensure the smooth and full implementation of the various aspects of the Amended Agreement. To date, the Bank has complied in fhll with
1 After obtaining required approvals, FUSB changed its name to First US Bank on December 15,2014.

Case 1:09-cv-00644-WS-M Document 19 Filed 12/07/15 Page 2 of 4
the various parts of the Amended Agreement and, with one exception, satisfied all of its commitments thereunder. That exception is Part TIE, Special Financing Program, paragraph 30, of the Fair Lending Initiatives section of the Order, discussed more fully below.2
By mutual consent of the parties, and pursuant to paragraph 40 of the Amended Agreement, the expiration of the term of the Amended Agreement bas been extended to May 15, 2016. Special Financing Program
Under the terms of the original Agreement, the Bank also committed to invest a minimum offive lnmdred thousand dollars ($500,000) over the duration of the Agreement in a special financing prog1·am for residential and CRA small business and community development loans. The parties later agreed, and the Court approved, an expanded list of approved ways in which the bank could disburse the funds in the special financing program. The Bank has made vast progress in distributing the fund through the origination of these loans and only 4.5% of the fund remains to be disbursed. However, despite the Bank's best and consistent efforts, the program funds have not been fully exhausted, a requirement for the termination of the Amended Agreement. It is the parties' hope that with the new branch location, noted below, the bank will have an opportunity to originate loans that qualify under this fund, thereby allowing the bank to deplete the fund fully.
In the event the Bank's obligations in the Amended Agreement pertaining to the special discount fund are satisfied before May 15,2016, the parties will move this Co1nt for an cilrly termination of the term of the Amended Agreement.
2 Since the parlies' most recenl joint status report, the bank has fulfilled its commitment under the Amended Agreement to open an additional branch in an area defined in the Amended Agreement as majority-minority. The branch at2619 Universlly Blvd, Tuscaloosa, Alabama 35401 opened for business on Oclobcr 19, 2015.
2

Case 1:09-cv-00644-WS-M Document 19 Filed 12/07/15 Page 3 of 4

Decembet~5, Respectfully submitted on

For First US Bank
Davtd M. Smit 1 AS -0455-S83D) John P. Dulin, Jr. Maynard, Cooper and Gale, P.C. 19016thAveN#2400 2400 Regions/Harbert Plaza Birmingham, AL 35203 (205) 254-1000 (205) 254-1999 (fax) dsmi th@maynardcooper .com

For the United States
Steven H. Rosenbaum Chief Housing and Civil Enforcement Section
Deputy Chief Mat1a Campos Attomey U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530 marta.campos@usdo j.gov (202) 514-4733 (202) 514-1116 (fax)

Kenyen R. Brown United States Attorney

Holly L. Wiseman ( ISEH7352) Assistant United Sta es Attomey 63 South Royal Street, Suite 600 Mobile, Alllbama 36602 holly.wiseman@usdoj.gov (251) 415-7104 .
(251) 441-5051 (fax)

3

Case 1:09-cv-00644-WS-M Document 19 Filed 12/07/15 Page 4 of 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on theTth day of December 2015, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all attomeys of record.
Martr't!d:=~
Attomey U.S. Department of JtJstice Civil Rights Division Housing & Civil Enforcement Section
4

 
 Case 1:09-cv-00644-WS-M Document 21 Filed 04/27/16 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA

UNITED STATES OF AMERICA,

)

)

Plaintiff,

)

)

v.

)

)

FIRST UNITED SECURITY BANK,

)

nlk/a FIRST US Bank,

)

)
_________D_ef_en_da_n_t._._________))

CIVIL ACTION NO. I :09-cv-00644-WS-M

JOINT STATUS REPORT I. INTRODUCTION
In response to the Court's order of December 16, 2015, the patties submit this final joint notice to report on the status of the implementation of the settlement terms, as set forth in the Amended Agreed Order for Resolution ("Amended Agreement") entered by the Court on May 7, 2014.
The Amended Agreement resolved the claims of the United States that the defendant, First United Security Bank, now known as First US Bank1 ("FUSB" ot· "the Bank"), violated the Fair I-IO\tsing Act ("FHA"), 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-169lf, by engaging in a pattern or practice of racial disctitnination in the setting of interest rates for first-lien refinance loans originated in 2004 for owner-occupied one-to-four family houses and by failing to serve the lending needs of majority African-American census tracts in west central Alabama on an equal basis with majority-white tracts.
The parties can now report all provisions of the Amended Agreement have been met or

1 After obtaining required appi'Ovals, FUSB changed Its name to First US Bank on December 15,2014.

Case 1:09-cv-00644-WS-M Document 21 Filed 04/27/16 Page 2 of 3

completed, including the depletion of the special financing program for residential and CRA

small business and community development loans.

Considering the Bank's obligations in the Amended Agreement are fully met, the parties

move this· Court for an early termination of the term of the Amended Agreement.

Respectflltly submitted on April Zl;2016,

For the United States

David M. Smith (ASB-04 5-S 3D) John P, Dulin, Jr. Maynard, Cooper and Gale, P.C. 1901 6th Ave N # 2400 2400 Regions/Harbert Plaza Birmingham, AL 35203 (205) 254-1 000 (205) 254-1999 (fax) dsmith@maynardcoopet·.com

Smneena Shina Mf~jeed Acting Chief Housing and Civil Enforcement Section
Jon M. Seward Deputy Chief Marta Campos Attorney U.S. Department of J\tstice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530 marta.campos@usdoj .gov (202) 514-4733 (202) 514-1116 (fax)

Kenyen R. Brown United States Attomey

Hol~~/t£2fk
Assistant United StatesAttomey 63 South Royal Street, Suite 600 Mobile, Alabama 36602 holly.wiseman@usdoj.gov (251) 415-7104 (251) 441-5051 (fax)
2

Case 1:09-cv-00644-WS-M Document 21 Filed 04/27/16 Page 3 of 3
CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the'Z-'hh day of April20!6, the foregoing was electronically filed with the Clerk ofthe Court using the CM/ECF system which will send notification of such filing to all attorneys of record.
.~ca~·
Marta Campos Attorney U.S. Department of Justice Civil Rights Division Housing & Civil Enforcement Section
3

 
 Case: 1:09-cv-644 As of: 11/06/2017 12:56 PM CST 1 of 3

U.S. District Court Southern District of Alabama (Mobile) CIVIL DOCKET FOR CASE #: 1:09−cv−00644−WS−M

CLOSED2013

United States of America v. First United Security Bank Assigned to: Chief Judge William H. Steele Referred to: Magistrate Judge Bert W. Milling, Jr Cause: 42:405 Fair Housing Act
Plaintiff

Date Filed: 09/30/2009 Date Terminated: 03/26/2013 Jury Demand: None Nature of Suit: 443 Civil Rights: Accommodations Jurisdiction: U.S. Government Plaintiff

United States of America

represented by Gary A. Moore U.S. Attorney's Office 63 South Royal Street, Suite 600 Mobile, AL 36602 251−441−5845 Fax: 251−441−5051 Email: gary.moore2@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Marta Campos 950 Pennsylvania Ave., NW Washington, DC 20530 202−514−4733 Email: marta.campos@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Holly Lee Wiseman U.S. Attorneys Office 63 S. Royal St., Rm. 600 Mobile, AL 36602 251−441−5845 Fax: 251−441−5131 Email: holly.wiseman@usdoj.gov ATTORNEY TO BE NOTICED

V. Defendant First United Security Bank

represented by David M. Smith Maynard, Cooper, and Gale P.C. 1901 6th Ave. N., Ste. 2400 Birmingham, AL 35203 205−254−1000 Email: dsmith@maynardcooper.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Stephen E. Brown Bressler, Amery & Ross, PC 420 20th Street North, Suite 2200 Birmingham, AL 35203 205−719−0400 Fax: 205−719−0500 Email: sbrown@bressler.com TERMINATED: 02/13/2014 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 1:09-cv-644 As of: 11/06/2017 12:56 PM CST 2 of 3

John P. Dulin , Jr. Kazmarek, Mowrey, Cloud, Laseter, LLP 3008 7th Avenue South Birmingham, AL 35233 Email: jdulin@maynardcooper.com ATTORNEY TO BE NOTICED
Ronald R. Glancz Venable LLP 575 7th Street, NW Washington, DC 20004 Email: rglancz@venable.com ATTORNEY TO BE NOTICED

Date Filed 09/30/2009 09/30/2009 10/01/2009
10/09/2009
11/17/2009 11/18/2009 03/26/2013
11/27/2013 02/13/2014 02/13/2014

# Docket Text
1 COMPLAINT against First United Security Bank, filed by United States of America. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4) (Moore, Gary) (Additional attachment(s) added on 10/2/2009: # 5 Civil Cover Sheet) (mpp, ). (Entered: 09/30/2009)
2 Proposed Consent Decree by United States of America and First United Security Bank. (Moore, Gary) (Entered: 09/30/2009)
3 Order entered, A Notice of Assignment to United States Magistrate Judge for Trial is attached to this Order. If they so desire, the parties are requested to confirm their consent in writing to have the undersigned Magistrate Judge conduct any and all proceedings in this action not later than October 8, 2009. However, only one consent form, signed by counsel for all parties, is to be filed. If written consent is not filed by October 8, 2009, the Clerk is directed to reassign this action to a United States District Judge. Signed by Magistrate Judge Bert W. Milling, Jr on 10/1/09. (Attachments: # 1 Consent Form) (clr) (Entered: 10/01/2009)
4 This action has been transferred from the docket of Magistrate Judge Bert W. Milling, Jr., and is now assigned to the docket of Judge William H. Steele. To ensure that your pleadings are referred to the proper Judge and Magistrate Judge with as little delay as possible, please use the letter suffix WS−M after the case number on all future pleadings. (clr) (Entered: 10/09/2009)
Set/Reset Hearings: Telephone Conference set for 11/18/2009 at 10:00 AM in US Courthouse, Judge's Chambers, 113 St. Joseph Street, Mobile, AL 36602 before Judge William H. Steele. (mbp) (Entered: 11/17/2009)
5 Agreed Order For Resolution entered. The Court shall retain jurisdiction for the duration of this Agreement to enforce the terms of the Agreement, after which time the case shall be dismissed with prejudice.. Signed by Judge William H. Steele on 11/18/09. (tgw) (Entered: 11/18/2009)
6 Order that because the case is fully resolved by settlement, with only full execution of the settlement delayed, the action should be closed for statistical purposes. The parties are ordered to file and serve notice promptly should the agreement terminate according to its terms or should they seek termination. Should the agreement not be earlier terminated, the parties are ordered to file, by 4/1/2014, a joint status report concerning the projected termination date of the agreement. Signed by Chief Judge William H. Steele on 3/26/2013. (sdb) (Entered: 03/26/2013)
7 NOTICE by United States of America of Substitution of Counsel (Wiseman, Holly) (Entered: 11/27/2013)
8 MOTION to Substitute Attorney by First United Security Bank. (Smith, David) (Entered: 02/13/2014)
9 ENDORSED ORDER GRANTING 8 Motion to Substitute Attorney filed by David M. Smith. Attorney Stephen E. Brown terminated. Signed by Magistrate Judge Bert W. Milling, Jr on 2/13/2014. (clr) (Entered: 02/13/2014)

Case: 1:09-cv-644 As of: 11/06/2017 12:56 PM CST 3 of 3

03/28/2014 04/08/2014
05/06/2014 05/07/2014 05/07/2014 09/26/2014 09/26/2014 09/29/2014
04/09/2015 04/09/2015 04/13/2015 12/07/2015 12/08/2015 12/16/2015
04/27/2016 04/27/2016 04/27/2016

10 STATUS REPORT Joint by United States of America. (Campos, Marta) (Entered: 03/28/2014)
11 Order noting the 10 Joint Status Report. The parties are ordered to file and serve notice promptly should the agreement terminate according to its terms or should they seek termination. Should the agreement not be earlier terminated, the parties are ordered to file, by 10/15/2014, a joint status report concerning the projected termination date of the agreement. Signed by Chief Judge William H. Steele on 4/8/2014. (tgw) (Entered: 04/08/2014)
12 Joint MOTION to Amend Order of District Judge 5 Order, by United States of America. (Attachments: # 1 Text of Proposed Order proposed amended order, # 2 memo in support of motion) (Campos, Marta) (Entered: 05/06/2014)
13 ENDORSED ORDER granting 12 Joint Motion to Amend Agreed Order. Signed by Chief Judge William H. Steele on 5/7/2014. (Steele, William) (Entered: 05/07/2014)
14 Amended Agreed Order for Resolution. Signed by Chief Judge William H. Steele on 5/7/2014. (jlr) (Entered: 05/09/2014)
15 STATUS REPORT Joint by United States of America. (Campos, Marta) (Entered: 09/26/2014)
REFERRAL OF 15 Status Report to Judge Steele. (tgw) (Entered: 09/26/2014)
16 Order noting the 15 Status Report. The parties are ordered to file and serve notice promptly should the agreement terminate according to its terms or should they seek termination. Should the agreement not be earlier terminated, the parties are ordered to file, by April 15, 2015, a joint status report concerning the projected termination date of the agreement. Signed by Chief Judge William H. Steele on 9/29/2014. (tgw) (Entered: 09/29/2014)
17 STATUS REPORT Joint by United States of America. (Campos, Marta) (Entered: 04/09/2015)
REFERRAL OF 17 Status Report to Judge Steele. (sdb) (Entered: 04/09/2015)
18 Order re: 17 Status Report filed by United States of America is noted. Should the agreement not be earlier terminated, the parties are to file a Status Report by 12/15/15. Signed by Chief Judge William H. Steele on 4/13/2015. (mbp) (Entered: 04/13/2015)
19 STATUS REPORT Joint by United States of America. (Campos, Marta) (Entered: 12/07/2015)
REFERRAL OF 19 Status Report to Judge Steele. (sdb) (Entered: 12/08/2015)
20 Order noting the 19 Status Report. The parties are ordered to file and serve notice promptly should the agreement terminate according to its terms or should they seek termination. Should the agreement not be earlier terminated, the parties are ordered to file, on or before May 15, 2016, a joint status report concerning the projected termination date of the agreement Status Report due by 5/15/2016. Signed by Chief Judge William H. Steele on 12/16/2015. (tgw) (Entered: 12/16/2015)
21 Joint Status Report by United States of America. (Campos, Marta) Modified on 4/27/2016 (mbp). (Entered: 04/27/2016)
REFERRAL OF 21 Joint Status Report to Judge Steele. (mbp) (Entered: 04/27/2016)
22 Order re: 21 Status Report. The embedded motion for early termination of the term of the Amended Agreed Order for Resolution is granted. Pursuant to paragraph 39(b) of the Amended Order, (Doc. 14 at 20), the Agreement is terminated. Pursuant to paragraph 43 of the Amended Order, (id. at 21), this action is dismissed with prejudice, and the Court's retention of jurisdiction is terminated. Signed by Chief Judge William H. Steele on 4/27/2016. (tgw) (Entered: 04/28/2016)

 
 Hom e » Briefing Room » Ju stice New s

Department of Justice

Office of Public A ffairs

FOR IMMEDIA TE RELEASE

Wednesday , September 30, 2009

Justice Department Reaches Settlement with First United Security Bank of T homasville, Alabama, Regarding Alleged Discrimination in Lending
Settlement Ensures Equal Lending Services to A frican-Americans
WA SHINGTON – First United Security Bank of Thomasv ille, A la., will inv est more than $600,000, open a new branch in an African-A merican neighborhood in west central Alabama and take other steps as part of a settlement to resolv e allegations that it engaged in a pattern of discrimination on the basis of race, the Justice Department announced.

The settlement was filed today in conjunction with the department’s complaint in federal court in Mobile, A la. The complaint alleges that the bank charged African-American borrowers higher rates than similarly -situated white borrowers on home mortgage-related loans. The complaint also alleges that the bank has unlawfully failed to prov ide its lending products and serv ices on an equal basis to majority African-American areas in west central Alabama, a practice known as redlining. The lawsuit is brought under the federal Fair Housing A ct and the Equal Credit Opportunity A ct.

Under the agreement, which remains subject to court approv al, First United Security Bank is prohibited from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.

“Ev ery person deserv es the comfort of knowing they will not be subjected to discrimination because of their race when they borrow money to buy a home or another major purchase. A lending institution must treat all potential borrowers equally , regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan serv ices and in determining the rates charged on its loans,” said Loretta King, Acting A ssistant Attorney General for the Civ il Rights Div ision. “We commend First United Security Bank on working cooperativ ely with the department on today ’s settlement, which will ensure fair treatment of African-American borrowers and neighborhoods.”
“For families and small businesses in the Southern District of Alabama, hav ing access to
credit on terms av ailable to the general public is v ital to confront ev ery day challenges, let alone those made more acute in this economic env ironment. This office will respond robustly to protect a person’s access to fair credit,” said Acting U.S. A ttorney Eugene Seidel for the Southern District of Alabama.
Under the settlement, First United Security Bank will open one new branch and ex pand ex isting operations in majority African-A merican areas of west central Alabama. The bank will also inv est $500,000 in a special financing program, and spend more than $1 1 0,000 for outreach to potential customers, promotion of its products and serv ices and consumer financial education in these areas.

The lawsuit originated from a referral from the Federal Deposit Insurance Corporation (FDIC), the bank's regulator, regarding the pricing discrimination issue. First United Security Bank cooperated fully with the department’s inv estigation into its lending practices and agreed to settle this matter without contested litigation. A copy of the complaint against First United Security Bank and the Agreed Order for Resolution between the United States and the Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov /fairhousing.

09-1 062

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