Wednesday, September 12, 2012

Justice Department Reaches Settlement with Luther Burbank Savings to Resolve Allegations of Lending Discrimination in California

The Justice Department announced today that Luther Burbank Savings will invest $2 million in California communities and take other steps as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race and national origin.
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Central District of California.   The complaint alleges that from 2006 through mid-2011, Luther enforced a $400,000 minimum loan amount policy for its wholesale single-family residential mortgage loan program.   The department alleges that this policy or practice had a disparate impact on the basis of race and national origin .
“Today’s settlement demonstrates that the Justice Department is committed to addressing a wide range of abuses in the credit market,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.   “It is critical that lenders have policies in place to ensure that they don’t discriminate in their lending programs.   We commend Luther Burbank Savings for revising its policies and working with the Justice Department to reach an appropriate resolution in this case.”


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