• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 1 of 9 PageID #: 1

IN THE UNITED STATES DISTRICT COURT

J \.:Il:f'<SHON FOR THE EASTERN DIF.~f.~.cT", Of NEW YORK
~O. M.J, . ~,' ~~' ~~~':T:~~~;~': UNITED STATES OF AMERICA

FI LES
IN CLERK'S OFFICE

Plaintiff, v.

CVNO'02 B!§t1W

FIDELITY FEDERAL BANK, FSB

Defendant.

COMPLAINT The United States of America alleges:
1. The United States brings this action to enforce provisions of the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691, et seq. ("ECOA"), and its implementing regulations located at 12 CFR Part 202 ("Regulation B") .
2. Defendant Fidelity Federal Bank, FSB ("Fidelity") has engaged in a pattern or practice of discrimination in its subprime credit card programs in violation of ECOA and Regulation B.
3. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1345 and 15 U.S.C. § 1691e(h) , and venue is appropriate pursuant to 28 U.S.C. § 1391(b) and (c).
4. Fidelity is incorporated under the laws of California with its principal place of business in Glendale, California.
5. Fidelity is a wholly-owned subsidiary of First Bank of Oak Park, a multibank holding company.

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 2 of 9 PageID #: 2
6. Fidelity is a creditor as defined by section 702(e) of ECOA, 15 U.S.C. § 1691a(e), and by Regulation B, 12 CFR 202.2(1).
7. Fidelity's primary regulator is the Office of Thrift Supervision (HOTSH). In May 1999, the OTS conducted a compliance examination of Fidelity's subprime credit card lending practices to evaluate compliance with ECOA, Regulation B, and other consumer protection laws and regulations.
8. Based on information gathered in its examination, the OTS determined that it had reason to believe that Fidelity and its business partners ("service providers") had engaged in a pattern or practice of discrimination in violation of ECOA and Regulation B. On March 2, 2001, the OTS referred the matter to the United States Attorney General pursuant to 15 U.S.C. § 1691e (g) .
9. Fidelity offers a broad range of financial services including demand and time deposits, mortgage loans and credit cards.
10. In 1997, Fidelity entered the subprime credit card market. Fidelity issued and owned subprime credit cards marketed pursuant to contractual agreements between Fidelity and thirdparty service providers.
11. Fidelity entered into agreements with four service providers to market its subprime credit cards:
a. On or about February 24, 1997, Fidelity entered into an
2

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 3 of 9 PageID #: 3
agreement with First Alliance Corporation and its affiliates ("FACO") to provide horne equity secured subprime credit cards. Fidelity was the issuer and owner of the credit cards. b. On or about March 5, 1997, Fidelity entered into an agreement with American Direct Credit, LLC ("ADC") to market subprime credit cards through a network of dealer-distributors conducting in-horne sales of various household products. Fidelity was the issuer and owner of the credit cards. c. On or about November 21, 1997, Fidelity entered into an agreement with MMG Direct, Inc. ("MMG") to market subprime credit cards to members of African-American and other church groups. On or about December 10, 1997, Fidelity entered into an agreement with MMG to market subprime credit cards through automobile dealerships. Fidelity was the issuer and owner of the credit cards. d. On or about March 31, 1998, Fidelity entered into an agreement with Direct Furniture, Inc. ("Direct Furniture") to market subprime credit cards to Hispanics in the greater New York Metropolitan area through in-horne furniture sales. Fidelity was the issuer and owner of the credit cards.
3

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 4 of 9 PageID #: 4
12. Fidelity, prior to executing these marketing agreements, failed to perform adequate due diligence on the service providers and failed to ensure that the service providers had policies in place which would ensure compliance with fair lending laws.
13. Fidelity, through its relationship with Direct Furniture, engaged in abusive collection practices in its credit card program which harassed customers on the basis of their Hispanic national origin. For example, debt collectors made threats relating to deportation and immigration-related issues. This violated ECOA, 15 U.S.C. § 1691(a) (1), and Regulation B, 12 C.F.R. 202.4.
14. Fidelity, through its relationship with Direct Furniture, (a) discouraged applicants who received income from public assistance from applying for Fidelity credit cards; and (b) had a policy of offering applicants who received income from public assistance less favorable terms on Fidelity credit cards than similarly situated applicants who did not receive public assistance. This discriminated against applicants on the basis of their receipt of public assistance in violation of ECOA, 15 U.S.C. § 1691(a) (2), and also violated Regulation B, 12 C.F.R. 202.4, 202.5, and 202.6.
15. Fidelity, through its relationship with Direct Furniture, had a policy of requiring younger applicants living
4

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 5 of 9 PageID #: 5
with their parents and not in charge of paying the bills in the household to have their parents co-sign an application for a Fidelity credit card, even where the younger applicants were of an age to contract. This discriminated against applicants on the basis of age in violation of ECOA, 15 U.S.C. § 1691(a) (1), and also violated Regulation B, 12 C.F.R. 202.4, 202.5, 202.6, and 202.7.
16. Fidelity, through its relationship with Direct Furniture, had a policy of requiring all members of a household to sign an application for a Fidelity credit card. This violated Regulation B, 12 C.F.R. 202.7.
17. Fidelity, through its relationship with Direct Furniture, failed to adjust applicants' nontaxable income to make it comparable to taxable income, which disadvantaged applicants receiving income from nontaxable sources such as child support, retirement benefits, social security, and disability payments. This violated Regulation B, 12 C.F.R. 202.6.
18. Fidelity, through its relationship with ADC, had a policy of denying credit to Fidelity credit card applicants unable to read and understand English. This discriminated against applicants on the basis of national origin in violation of ECOA, 15 U.S.C. § 1691(a) (1), and Regulation B, 12 C.F.R. 202.4, 202.5, 202.6, and 202.7.
19. Fidelity, through its relationship with ADC, required
5

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 6 of 9 PageID #: 6
that multiple Fidelity credit card applications from persons listed under the same telephone number be rejected. This violated Regulation B, 12 C.F.R. 202.6.
20. Fidelity, through its relationship with Direct Furniture, on at least one occasion pulled a credit report on a non-applicant spouse. This violated Regulation B, 12 C.F.R. 202.5.
21. Fidelity, through its relationship with ADC and MMG, failed to provide adverse action notices and failed to provide timely adverse action notices. This violated ECOA, 15 U.S.C. § 1691(d), and Regulation B, 12 C.F.R. 202.9.
22. Fidelity, through its relationship with Direct Furniture, failed to provide complete adverse action notices containing notification of applicants' rights under ECOA. This violated ECOA, 15 U.S.C. § 1691(d), and Regulation B, 12 C.F.R. 202.9.
23. Fidelity, through its relationships with Direct Furniture and FACO, failed to provide complete adverse action notices containing the specific reasons for the adverse action. This violated ECOA, 15 U.S.C. § l691(d), and Regulation B, 12 C.F.R. 202.9.
24. Fidelity, through its relationship with Direct Furniture, retained data on applicants' race and sex by retaining photographic identification in applicant files. This violated
6

Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 7 of 9 PageID #: 7
Regulation B, 12 C.F.R. 202.12. 25. Fidelity, through its relationship with MMG, collected
data on applicants' age, ethnicity, marital status, and religious affiliation. This violated Regulation B, 12 C.F.R. 202.5, and 202.12.
26. Fidelity, through its relationship with Direct Furniture, ADC, and MMG failed to retain records from the Direct Furniture, ADC, and MMG programs. This violated Regulation B, 12 C.F.R. 202.12.
27. Fidelity's policies and practices, as described in the preceding paragraphs, constitute a pattern or practice of discrimination in violation of ECOA and Regulation B.
28. Fidelity's pattern or practice of discrimination continued from the first quarter of 1997 through at least the fourth quarter of 1999.
29. Persons who have been victims of Fidelity's pattern or practice of discrimination are aggrieved applicants under ECOA, 15 U.S.C. § 169le. As a consequence of Fidelity's policies and practices described herein, these applicants have been denied their rights under ECOA and have suffered injury and damages.
30. The discriminatory pOlicies and practices of Fidelity as described herein were intentional and willful, and were implemented with reckless disregard for the rights of credit applicants.
7

., '

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 8 of 9 PageID #: 8

The United States further prays for such additional relief as the interests of justice may require.

ALAN VINEGRAD United States Attorney Eastern District of New York

JOHN ASHCROFT
:>
Assistant Attorney General Civil Rights Division

MARLA TEPPER (MT7529) Assistant U.S. Attorney Civil Rights Litigation 1 Pierrepont Plaza, 16th Fl. Brooklyn, NY 11201

Housing and Civil Enforcement Section
Civil Rights Division
JON M. SEWARD Deputy Chief MICHELE ARONOWITZ KENNETH M. 'SCOTT (KS0940) Attorneys Housing and Civil Enforcement
Section Civil Rights Division U.S. Department of Justice P.O. Box 65998 Washington, D.C. 20035-5998 (202) 305-1680

9

••

• • Case 1:02-cv-03906-NG-MDG Document 1 Filed 07/08/02 Page 9 of 9 PageID #•: 9

•

 
 • • Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 1 of 19 PageID #: 12

IN THE UNITED STATES DISTRICT COURT
GO. M, FOR THE EASTERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA Plaintiff, v.
FIDELITY FEDERAL BANK, FSB Defendant.

f'r" CLER~(~f~ C:Fr--:iCc
O.SII DlSTR!CT eOtin-f, E \1 y_
*:
BROOKLYN OFFICE

SETTLEMENT AGREEMENT AND ORDER The United States of America filed this Action against defendant Fidelity Federal Bank, FSB ("Fidelity") alleging a pattern or practice of violations of the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691, et.§.§.g. ("ECOA"), and its implementing regulation at 12 CFR Part 202 ("Regulation B"). Fidelity has denied the allegations and asserts that it is committed to compliance with the fair lending laws and regulations and that it has conducted its lending at all times in accordance with ECOA and Regulation B. The United States and Fidelity have agreed to enter into this Settlement Agreement simultaneously with the filing of this Action to resolve fully and finally all claims asserted, or that could have been asserted, in the Action.

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 2 of 19 PageID #: 13
I
INTRODUCTION Beginning in 1997, Fidelity's prior management, operating under the auspices of the prior ownership of the Bank, entered into a new line of business of issuing and servicing credit cards. Fidelity entered into credit card marketing agreements with American Direct Credit LLC ("ADC"), Direct Furniture, Inc. ("Direct Furniture"), First Alliance Corp, and MMG Direct Inc. Under these agreements, Fidelity agreed to issue its MasterCard to qualified applicants who had applied to these service providers for credit. These service providers agreed to undertake certain processing, underwriting, and collection services. Fidelity's regulator, the Office of Thrift Supervision ("OTS"), commenced a safety and soundness examination of Fidelity on June 15, 1998. That examination criticized the credit quality and internal controls of Fidelity's credit card operation. The OTS Report of Examination, delivered to Fidelity October 14, 1998, alleged that the Bank's then existing management had in place an infrastructure that was inadequate for effective credit card oversight prior to engaging in this activity, and that significant growth in credit cards had been achieved without adequate internal controls and oversight by the then existing management and the then existing Board of Directors. On May 17, 1999, OTS began a regularly scheduled compliance
2

f

• Case 1:02-cv-03906-NG-MDG

Document 2

• Filed' ... 07/25/02 Page 3 of 19 PageID #: 14

,"

examination of Fidelity. The OTS concluded that the credit card programs had created a high level of compliance, legal, and reputation risk and focused the examination on the subprime credit card programs. On the basis of that examination as well as information voluntarily provided by Fidelity prior to the examination, OTS alleged numerous substantive violations of ECOA and other consumer protection laws. OTS referred the pattern or practice of possible ECOA and Regulation B violations by Fidelity to the Department of Justice on March 2, 2001.
II
ALLEGATIONS AND RESPONSE The United States alleges that Fidelity issued credit cards in violation of ECOA and Regulation B, both through its own policies and by failing to ensure that the above-mentioned service providers had policies in place which would ensure their compliance with ECOA and Regulation B. The United States further alleges that Fidelity is responsible, through its relationship with the service providers, for the following: (1) engaging in abusive collection practices in its credit card program which harassed customers on the basis of their Hispanic national origin; (2) discouraging applicants who received income from public assistance from applying for Fidelity credit cards and having a policy of offering applicants who received income from public assistance less favorable terms on Fidelity credit cards than

3

• Case 1:02-cv-03906-NG-MDG

Document 2

• . File.d 07/25/02 Page 4 of 19 PageID #: 15

"

similarly situated applicants who did not receive public assistance;
(3) having a policy of requiring all members of a household to sign an application for a Fidelity credit card;
(4) failing to adjust applicants' nontaxable income to make it comparable to taxable income, which disadvantaged applicants receiving income from nontaxable sources, such as child support, retirement benefits, social security, and disability payments;
(5) having a policy of denying credit to Fidelity credit card applicants unable to read and understand English;
(6) having a policy requiring that multiple Fidelity credit card applications from persons listed under the same telephone number be rejected;
(7) failing to provide complete adverse action notices in a timely fashion, containing the specific reasons for the adverse action and the applicants' rights under ECOA;
(8) pulling a credit report on a non-applicant spouse; and (9) failing to comply with the record-keeping, data collection and reporting requirements of Regulation B. Fidelity denies the allegations of the United States and denies specifically that it has violated ECOA, Regulation B or any other fair lending law or regulation. Fidelity asserts that its credit card programs were operated in a non-discriminatory manner, in compliance with ECOA, Regulation B, and other fair

4

• • Case 1:02-cv-03906-NG-MDG Document 2 File'd.. 07/25/02 Page 5 of 19 PageID #: 16
lending laws and regulations, and provided access to credit to a generally-underserved population. Fidelity notes that it has cooperated voluntarily with the examinations by the OTS and the subsequent investigation by the United States Department of Justice.
III RESOLUTION OF DISPUTE The Parties have agreed that to avoid costly and protracted litigation this controversy should be resolved voluntarily. The Parties have also agreed that there should be no evidentiary hearing, trial or other adjudication on the merits, and that entry of this Settlement Agreement and Order is not to be construed as an admission by Fidelity of the validity of the claims asserted against Fidelity. The Parties intend that this Agreement shall resolve and discharge all claims that were or could have been brought by the United States against Fidelity in this Action. Now therefore, on the basis of the foregoing representations of the United States and Fidelity, it is hereby ORDERED, ADJUDGED, and DECREED as follows:
IV GENERAL NONDISCRIMINATION PROVISIONS A. Fidelity is permanently enjoined from engaging in, and from knowingly permitting any of its Service Providers (as defined below) from engaging in, any act or practice in
5

• • Case 1:02-cv-03906-NG-MDG Document 2 File"d 07/25/02 Page 6 of 19 PageID #: 17
connection with its Credit Card Programs (as defined below) that violates ECOA or Regulation B. The term "Service Providers," as used in this Settlement Agreement, is defined as third parties who provide marketing, servicing and underwriting services for Credit Card Programs. B. Fidelity shall ensure that any program through which it originates, owns, or services credit card accounts (the "Credit Card Programs") is free from any violation of ECOA or Regulation B.
V CREDIT CARD PROGRAM OPERATIONS A. To promote the objectives of ECOA and Regulation B with respect to Fidelity's current or future Credit Card Programs, Fidelity shall: 1. inform its current and future credit card Service Providers that Fidelity will adhere to ECOA and Regulation B in all aspects of the credit process, including by ensuring that any activities undertaken by its credit card Service Providers comply with ECOA and Regulation B; 2. ensure that all future applicants for credit cards issued by Fidelity are not placed in an underwriting risk classification on any basis that would violate ECOA or Regulation B; 3. ensure that all underwriting standards for its current
6

j'

• Case 1:02-cv-03906-NG-MDG

Document 2

• '. Filed 07/25/02 Page 7 of 19 PageID #: 18

"

and future Credit Card Programs are developed in compliance with ECOA and Regulation B; 4. ensure that its current and future credit card programs comply with ECOA's regulatory notification, data collection and record retention requirements, including by ensuring that its credit card Service Providers comply with such requirements; 5. ensure that all current and future collection activities performed by Fidelity, or on credit card accounts owned by Fidelity, comply with ECOA and Regulation B; 6. ensure that all current and future program materials, including training material, credit application forms, and adverse action notice statements, used in Fidelity Credit Card Programs conform to the requirements and prohibitions of ECOA and Regulation B; and 7. require its current and future credit card Service Providers to undergo fair lending training.
VI COMPLIANCE AND RISK MANAGEMENT PROGRAM A. Within sixty days of the entry of this Settlement Agreement, Fidelity shall provide to the Department of Justice a comprehensive Compliance and Risk Management Program (the "Program"). The Parties shall endeavor in good faith to agree on the terms of the Program, which shall be
7

• • Case 1:02-cv-03906-NG-MDG Document 2 File'd. 07/25/02 Page 8 of 19 PageID #: 19 ..
implemented within thirty days of the Parties' agreement on its terms. B. The Program shall be designed to confirm that, before Fidelity offers any new Credit Card Program that it does not currently offer or engages in such activity with a third party Service Provider (collectively, "New Activities"), Fidelity and any third party Service Provider involved in the New Activities will have in place policies, procedures, experienced personnel, and controls necessary to comply with ECOA and Regulation B. C. The Program shall specify the responsibilities and authority of management for compliance, and shall provide mechanisms to ensure accountability and establish standards for implementation of New Activities, including:
1. identification of applicable legal requirements; 2. establishment of appropriate expertise within
Fidelity and confirmation that third parties have appropriate levels of expertise; 3. due diligence review of any third-party Service Provider prior to entering into any binding commitment with the third party; 4. review of agreements with third-party Service Providers to ensure proper allocation of
8

• • Case 1:02-cv-03906-NG-MDG Document 2 File'd. 07/25/02 Page 9 of 19 PageID #: 20
compliance responsibilities and mechanisms to monitor third-party performance; 5. development or review of policies and procedures; 6. development of compliance tools to assist staff; 7. testing of systems, including document preparation, servicing, and management information systems; 8. review of documents and disclosures; 9. adoption of non-discriminatory underwriting criteria and pricing guidelines; 10. analysis of empirical data on which risk-based criteria are based; 11. monitoring of the use of credit scoring systems and collection of information for periodic validation; 12. review of marketing, advertising, and collections strategies; 13. staff training in compliance responsibility or, for third parties, confirmation of the adequacy of such training; 14. development of effective internal controls and meaningful reporting; 15. periodic independent testing of internal controls and compliance; and
9

• Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 10 of 19 PageID #: 21 "
16. prompt post-implementation review and testing. D. The requirements of this Section shall be binding on
Fidelity, its employees, successors and/or assigns. VII
IDENTIFICATION AND COMPENSATION OF AGGRIEVED PERSONS
A. Within five business days after entry of this Settlement Agreement, Fidelity shall deposit the sum of $1.6 million into the Fidelity Compensation Fund Trust Account (the "Compensation Fund"). The Compensation Fund shall be deposited in a separate interest bearing account. The Compensation Fund shall accrue interest at least equal to the coupon issue yield equivalent of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the entry of this Consent Decree, in accordance with 28 U.S.C. § 1961. Fidelity shall provide written verification to the Department of Justice of the deposit of this sum of money into such an account within three business days thereafter. The interest that accrues on the monies in the Compensation Fund shall become part of the Fund.
B. The Department of Justice will have full and sole discretion in determining the identity of each aggrieved person eligible for relief and the amount of monetary compensation to be distributed to each such aggrieved person.
10

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 11 of 19 PageID #: 22 "
C. The costs of locating, notifying, and paying aggrieved persons shall be paid from the Compensation Fund.
D. Within thirty days of entry of this order, Fidelity shall provide to the Department of Justice any written information in its possession or custody (including, to the extent available, electronically stored data) relating to applications for credit cards submitted to Fidelity for the ADC and Direct Furniture credit card programs between January 1, 1997, and September 30, 2000, including information concerning originations and servicing for those programs, and collections logs and histories. In addition, Fidelity shall promptly make available to the Department of Justice any other information in its possession, custody or control which the Department may reasonably request in connection with the identification of aggrieved persons or the location of those persons after they have been identified.
E. Fidelity shall have no ability to recover any of the monies deposited into the Compensation Fund.
F. Within thirty days of receiving a written request from the Department of Justice identifying aggrieved persons (by providing, at a minimum, full name and social security number), Fidelity shall request that Equifax, Trans Union and Experian (the "Credit Bureaus") delete any adverse
11

. '

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed'j 07/25/02 Page 12 of 19 PageID #: 23 "

credit notification for the identified aggrieved persons reported to the Credit Bureaus by Fidelity. G. The requirements of this Section shall be binding on Fidelity, its employees, successors and/or assigns.
VIII CONSUMER EDUCATION PROGRAM A. The Consumer Education Fund shall consist of any excess funds remaining in the Compensation Fund after compensating the aggrieved persons, which shall be distributed to consumer education groups to be mutually agreed upon by the Department of Justice and Fidelity. Each group will receive a share of available funds as determined by the Department of Justice. B. The consumer education provided under this Section will include the distribution of informative pamphlets or other forms of literature and sponsorship of credit counseling, or educational workshops or forums focusing on, but not limited to: 1. the fact that different credit card products carry different prices/rates, and that different sources charge different prices/rates for essentially the same product, and that the same source may charge different prices for the same product; 2. the importance of shopping among different providers of credit, and the questions to ask while shopping;
12

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed" 07/25/02 Page 13 of 19 PageID #: 24
3. how to evaluate and compare the ultimate price of competing loan products;
4. options to obtain credit that are available to borrowers with impaired credit; and
5. the non-discrimination requirements and other rights guaranteed by ECOA and Regulation B. IX TRAINING
A. Within sixty days of entry of this Settlement Agreement, Fidelity shall advise all employees engaged in Credit Card Program activities and current credit card Service Providers of the purpose and requirements of this Settlement Agreement.
B. Within one hundred and twenty days of the date of entry of this Settlement Agreement, Fidelity shall train all of its personnel involved: (i) in negotiating agreements to market or service Credit Card Programs; (ii) in developing credit policies for Credit Card Programs; (iii) in credit solicitation for Credit Card Programs; and (iv) in credit review processes and/or in credit/servicing for Credit Card Programs, of the requirements of ECOA, Regulation B, and this Settlement Agreement. Future employees engaged in Credit Card Program activities shall complete such training prior to assuming any responsibility in the above-listed areas. Fidelity shall maintain a log of the attendees at
13

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed'. 07/25/02 Page 14 of 19 PageID #: 25 "
each training. Copies of these logs shall be retained for the life of this Settlement Agreement and shall be subject to the inspection provisions of the Agreement. The requirements of this Paragraph, except with respect to the training of future employees, shall apply equally to any successors in interest and/or assigns of Fidelity. C. Fidelity shall provide ongoing training on an annual basis for all persons subject to the provisions in Paragraph B, above, regarding the requirements of ECOA, Regulation B, and this Settlement Agreement. D. All current and future training material for Credit Card Programs developed and used by Fidelity shall conform to the requirements of ECOA, Regulation B, and this Settlement Agreement.
X
RECORDKEEPING AND REPORTING REQUIREMENTS A. During the term of this Settlement Agreement, Fidelity shall retain all records related to compliance with the Agreement. This shall include credit card application files submitted for credit cards issued by Fidelity, as well as all credit card-related documents and notices relevant to any classification as to underwriting risk and any documents related to servicing or collection activities of credit cards issued by Fidelity.
14

:

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 15 of 19 PageID #: 26 "

B. During the term of this Settlement Agreement, upon reasonable notice from the Department of Justice, Fidelity shall make all documents required to be maintained pursuant to the Agreement available to the Department of Justice for inspection and copying at the Department of Justice's expense.
C. During the term of this Settlement Agreement, Fidelity shall report compliance with this Settlement Agreement to the Department of Justice semi-annually. The reports shall be submitted to the Department of Justice within ninety days after the last business day of Fidelity's second and fourth fiscal quarters. Each compliance report shall detail the actions taken to comply with this Settlement Agreement since the date of this Settlement Agreement, or the date of the prior report, as applicable, including a description of all compliance training, the dates held, instructors, content, and the individuals who attended. Each report shall also for the applicable time period: 1. describe all new third-party Service Provider arrangements for the provision of credit cards; 2. include a copy of all new credit card credit policies and third-party credit card Service Provider agreements; 3. list by category any new consumer complaints regarding

15

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed'. 07/25/02 Page 16 of 19 PageID #: 27 ."
Fidelity's credit card programs; and 4. include, in machine-readable form from its automated
loan tracking system for all new credit card applicants, the following information, to the extent available: a. the application number; b. the date the application was received; c. the source of the application; d. the number and relationship of co-applicants; e. the source of income; f. the type and amount of credit applied for and/or
received; g. the action taken on the application and the date; h. the reason for any adverse action (if applicable);
and i. delinquency status (if applicable) . D. The requirements of this Section shall be binding on Fidelity, its employees, successors and/or assigns.
XI JURISDICTION, DISMISSAL AND ENFORCEMENT A. The Parties stipulate and the Court finds that the Court has personal jurisdiction over the Defendant for purposes of this civil action, and subject matter jurisdiction over the claims in the civil action pursuant to 28 U.S.C. §§ 1331 and 1345, and 15 U.S.C. § 1691e(h).
16

• • -. Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 17 of 19 PageID #: 28
B. This Settlement Agreement and Order shall remain In effect for a period of three years from the date it is entered by the Court.
C. This case is dismissed with prejudice, except that this Court shall retain jurisdiction for the duration of the Settlement Agreement for the purpose of enforcing the terms of the Agreement. After the three-year term of the Settlement Agreement, it shall be considered to be terminated, without need for further action by the Parties, and the Court shall no longer have jurisdiction over this matter or the Parties.
D. This Settlement Agreement may be modified at any time by written agreement of the Parties, and without the need for Court approval. Any and all such written modifications shall be considered to be part of the Agreement.
E. The Parties agree to work in good faith and to use their best efforts to seek the Court's approval of this Settlement Agreement, to implement the terms of the Agreement, and to resolve informally any differences regarding interpretation of and compliance with this Agreement prior to bringing such matters to the Court for resolution.
17

• .. • Case 1:02-cv-03906-NG-MDG Document 2 Filed 07/25/02 Page 18 of 19 PageID #: 29 . '
THE PARTIES CONSENT TO THE ENTRY OF THIS SETTLEMENT AGREEMENT AS INDICATED BY THE SIGNATURES OF COUNSEL BELOW:

FOR PLAINTIFF UNITED STATES OF AMERICA: Dated: 7.,.;t ... ()~

ALAN VINEGRAD United States Attorney Eastern District of New York

RALPH F. BOYD, JR. Assistant Attorney General Civil Rights Division

MARLA TEPPER (MT7529) Assistant U.s. Attorney Civil Rights Litigation 1 Pierrepont Plaza, 16th Fl. Brooklyn, NY 11201

ty Chief ELE ARONOWITZ NETH M. SCOTT (KS0940) Attorneys Housing and Civil Enforcement Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Ave., N.W. Washington, DC 20530 (202) 305-1680

FOR DEFENDANT FIDELITY FEDERAL BANK, FSB:

Dated:

A~ l· <;"'tAMcllu--l
ANDREW L. SANDLER iASR..
ALAN KRIEGEL
ANAND S. RAMAN

Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, Washington, DC 20005 (202) 371-7000

N.W.

18

• • Case 1:02-cv-03906-NG-MDG Document 2 Filed'. 07/25/02 Page 19 of 19 PageID #: 30 ."
IT IS SO ORDERED.

UNITED

GE

19

 
 Case 1:0C2-acsve-013:0920-6c-vN-0G3-9M0D6G-NGD-MocDuGmentD4ocuFmileednt073/08F/0il5ed P0a6g/2e41/2o0f025 PagPeaIgDe#4: o<fp5ageID>

IN THE UNITED STATES DISTRICT COURT

~

FOR THE EASTERN DISTRICT OF NEW YORK V. ~ 141 I ~

.(), c~ ....
I f ?u>1'-90/ r'9't8

u~~"

:"

";0' co"",',(

UNITEDSTATESOFAMEruCA, )

)

Plaintiff,

)

)

~ifr

If. "0

"~ 4 .

(/t",~.

"

~ ""'N,.CV 02-03906 <IO>IY>

.>.'

v.

)

)

FIDELITY FEDERAL BANK. FSB,)

)

Defendant.

)

)

ORDER Having considered the United States' and Fidelity Federal Bank,FSB's joint motion to extend for ninety days the Court's jurisdiction over and the three-yell:\" term of Section VII.
Identification and Compensation ofAggrieved Persons, Section VIII. ConslUUer Education
Program and Section XI. Jurisdiction. Dismissal and Enforcement ofthe July 8, 2002 Settlement
Agreement and Order (hereinafter ''the Order"), the Court hereby grants the parties' joint motion
in its entirety and, therefore, IT IS HEREBY ORDERED THAT 1. Sections I. - VI. and Sections IX. - X. ofthe Order shall terminate on July 7, 2005; 2. Sectiollli VII VIII and XI ofthe Order shall be extended for ninety days; and

•

Case 1:0C2a-csve-013:0920-6c-vN-0G3-9M0D6-GNGD-MocDuGmentD4ocuFmileednt037/08F/0il5ed P0a6g/2e42/2o0f025 PagPeaIgDe #5: o<fp5ageID>

vrrr. 3. The Court shall retain jurisdiction until Sections YTI.. and XI. ofthe Order

terminate on October 5, 2005.

--r SO ORDERED AND ADJUDGED, tbi.a

fb

dayof Yv I)'

,2005.

A

I

UNITED STATES DISTRICI COURT

2

 
 Case: 1:02-cv-03906-NG-MDG As of: 03/11/2014 11:00 AM EDT 1 of 1
U.S. District Court Eastern District of New York (Brooklyn) CIVIL DOCKET FOR CASE #: 1:02−cv−03906−NG−MDG

CLOSED

United States of America v. Fidelity Federal Bank, FSB Assigned to: Judge Nina Gershon Referred to: Magistrate Judge Marilyn D. Go Cause: 42:1983 Civil Rights Act
Plaintiff

Date Filed: 07/08/2002 Date Terminated: 07/25/2002 Jury Demand: Both Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Plaintiff

United States of America

represented by Marla Anne Tepper United States Attorneys Office Eastern District of New York One Pierrepont Plaza, 16th Floor Brooklyn, NY 11215 (718) 254−6155 Fax: (718) 254−6180 Email: marla.tepper@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant Fidelity Federal Bank, FSB

Date Filed 07/08/2002
07/25/2002 06/24/2005 07/08/2005

# Docket Text
1 Complaint filed as to defendant(s) Fidelity Federal Bank, FSB.. Filed by Marla Tepper on behalf of United States of America. (Attachments: # 1 Civil Cover Sheet)(Villanueva, William) (Entered: 07/10/2002)
2 Settlement Agreement and Order dated 7/18/02 (Signed by Judge Gershon, dated 7/18/02) (Guzzi, Roseann) (Entered: 07/25/2002)
3 Joint MOTION for Settlement Extension by United States of America. (Tepper, Marla) (Entered: 06/24/2005)
4 ORDER Section 1−v1 and Sections 1X−X of order shall terminate July 7,2005. Sections V11,V111 and X1of order shall be extended for ninety days. . Ordered by Judge Nina Gershon on 7/7/05. (Jackson, Ramona) (Entered: 07/08/2005)