A Justice Department settlement with Texas Champion Bank of Alice, Texas is the latest reminder to U.S. lenders and other businesses of the importance of ensuring that their lending and other business practices are defensible under defensible under U.S. discrimination laws. An example of the rising tide of federal discrimination law enforcement against lenders specifically and U.S. businesses generally under the Obama Administration, U.S. lenders and other businesses should respond to the Texas Champion Bank and other federal discrimination law enforcement and settlement actions by reviewing and tightening their business practices to position their organizations to defend against rising exposures to discrimination changes by the government and private plaintiffs.
Texas Champion Bank Highlights
Under the settlement announced by the Justice Department on February 19, 2013, Texas Champion Bank must establish uniform pricing policies, conduct employee training and pay $700,000 to resolve allegations that it engaged in a prohibited pattern or practice of discrimination on the basis of national origin.
The Justice Department filed the settlement, which is subject to court approval, in conjunction with the Justice Department’s complaint in the U.S. District Court for the Southern District of Texas. The complaint alleges that Texas Champion charged higher prices on unsecured consumer loans made to Hispanic borrowers through its branch offices in violation of the Equal Credit Opportunity Act (ECOA).
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division established in February 2010. Since it establishment, the Fair Lending Unit has filed or resolved 24 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act. The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers.
“The complaint filed today demonstrates that the Civil Rights Division is committed to fair lending enforcement across the entire spectrum of credit markets,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division.
Enforcement of Federal Discrimination Laws Obama Administration Priority
Since taking office, President Obama has made enforcing federal laws prohibiting businesses from discriminating on the basis of sex and sexual orientation, national origin, race, religion, disability, age, union association or certain other protected status a key enforcement priority.
In addition to stepping up enforcement of long-standing requirements, the Obama Administration also has worked to strengthen and expand the scope of those requirements in several areas.
In response to these expanding enforcement exposures, all U.S. businesses should review and tighten the adequacy of their existing compliance and risk management practices to promote and document compliance. Businesses should review policies, practices and performance data for both structural and operational evidence of improper bias and implement appropriate risk management and compliance practices as warranted to mitigate their exposures.
If you have any questions or need help reviewing and updating your organization’s policies or risks under the Rehabilitation Act, ADA, GINA or other applicable laws, or if we may be of help with regard to any other workforce management, employee benefits or compensation matters, please do not hesitate to contact the author of this update, Board Certified Labor and Employment Attorney and Management Consultant Cynthia Marcotte Stamer at 469.767.8872.
About The Author
Management attorney and consultant Cynthia Marcotte Stamer helps businesses, governments and associations solve problems, develop and implement strategies to manage people, processes, and regulatory exposures to meet their business and operational goals and manage legal, operational and other risks. Board certified in labor and employment law by the Texas Board of Legal Specialization, with more than 25 years human resource, employee benefits and management experience, Ms. Stamer helps businesses manage their people-related risks and the performance of their internal and external workforce though appropriate human resources, employee benefit, worker’s compensation, insurance, outsourcing and risk management strategies domestically and internationally. Recognized in the International Who’s Who of Professionals and bearing the Martindale Hubble AV-Rating, Ms. Stamer also is a highly regarded author and speaker, who regularly conducts management and other training on a wide range of labor and employment, employee benefit, human resources, internal controls and other related risk management matters. Her writings frequently are published by the American Bar Association (ABA), Aspen Publishers, Bureau of National Affairs, the American Health Lawyers Association, SHRM, World At Work, Government Institutes, Inc., Atlantic Information Services, Employee Benefit News, and many others. For a listing of some of these publications and programs, see here. Her insights on human resources risk management matters also have been quoted in The Wall Street Journal, various publications of The Bureau of National Affairs and Aspen Publishing, the Dallas Morning News, Spencer Publications, Health Leaders, Business Insurance, the Dallas and Houston Business Journals and a host of other publications. Chair of the ABA RPTE Employee Benefit and Other Compensation Committee, a council member of the ABA Joint Committee on Employee Benefits, and the Legislative Chair of the Dallas Human Resources Management Association Government Affairs Committee, she also serves in leadership positions in many human resources, corporate compliance, and other professional and civic organizations. For more details about Ms. Stamer’s experience and other credentials, contact Ms. Stamer, information about workshops and other training, selected publications and other human resources related information, see here or contact Ms. Stamer via telephone at 469.767.8872 or via e-mail here.
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©2012 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc. All other rights reserved.