Case 4:13-cv-00077-RAJ Document 1 Filed 12/19/13 Page 1 of 7

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS PECOS DIVISION

FILE
DEC 192

UNITED STATES OF AMERICA, Plaintiff,
V.
FORT DAVIS STATE BANK, Defendant.

a,
CIVIL ACTION NO.
'3CV-'17

COMPLAINT The United States of America alleges: 1. This action is brought by the United States to enforce the Equal Credit Opportunity Act, 15 U.S.C. § 1691-1691f("ECOA"). 2. From at least 2008 to 2010, Defendant Fort Davis State Bank ("FDSB" or "the Bank") engaged in a pattern or practice of discrimination on the basis of national origin because it charged Hispanic borrowers higher interest rates on unsecured consumer loans compared to the rates charged to similarly situated non-Hispanic white borrowers. 3. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 1345 and 15 U.S.C. § 1691e(h). 4. Venue is proper pursuant to 28 U.S.C. § 1391(b) and (c) because Defendant resides in the Western District of Texas and because a substantial part of the events or omissions giving rise to this action occurred in the Western District of Texas.

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5. Defendant FDSB is a state-chartered bank based in Fort Davis, Texas. FDSB operates three branches in Fort Davis, Alpine, and Presidio, Texas. Until early 2013, FDSB operated a fourth branch in Odessa, Texas.
6. FDSB offers a variety of loan products, including mortgage loans, consumer
loans, commercial loans, and agricultural loans. The Bank originates its loans through loan
officers operating at one or more of its branches. 7. As of September 30, 2012, the Bank had total assets of $78.5 million and total
equity capital of $6.68 million. FDSB is subject to the regulatory authority of the Federal
Deposit Insurance Corporation ("FDIC"). 8. FDSB is subject to federal laws governing fair lending, including ECOA and the
regulations promulgated thereunder. ECOA prohibits financial institutions from discriminating on the basis of, inter alia, national origin in their lending practices. Charging higher prices for
loans on the basis of national origin, including charging higher rates of interest, is one of the discriminatory lending practices prohibited by ECOA. FDSB is a "creditor" within the meaning of section 702(e) of ECOA, 15 U.S.C. § 1691a(e).
9. Beginning in December, 2010, the FDIC conducted an examination of the lending practices of FDSB to evaluate compliance with ECOA. Based on analysis of the average rates of
interest that the Bank charged on unsecured consumer loans made between November 1, 2009 and November 30, 2010, the FDIC found reason to believe that FDSB had engaged in a pattern
or practice of discrimination on the basis of national origin against Hispanic borrowers.
10. On August 22, 2011, following its examination, the FDIC referred the lending
practices of FDSB to the United States Department of Justice pursuant to 15 U.S.C. § 1691e(g).
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11. After receiving the referral from the FDIC, the United States analyzed the interest rates that FDSB charged for unsecured consumer loans originated between January 1, 2008 and December 30, 2010. The United States also reviewed and evaluated the Bank's loan policies, procedures, and practices for that time period.
12. Prior to May 2011, FDSB had no written defined pricing guidelines or specific
policies related to loan pricing of unsecured consumer loans. It did not use a uniform pricing
system such as a matrix or rate sheet, and loan officers had broad subjective discretion to set interest rates on unsecured consumer loans.
13. Between at least January 1, 2008 and December 30, 2010, FDSB made approximately 750 unsecured consumer loans to Hispanic borrowers. During this period, FDSB charged interest rates to Hispanic borrowers for unsecured consumer loans that were 405 basis points1 higher, on average, than the rates charged to non-Hispanic borrowers. This disparity is statistically significant.
14. After accounting for relevant loan and borrower credit factors, including loan
term, loan amount, debt-to-income ratio, and indicators of the borrower's credit history, FDSB
charged interest rates to Hispanic borrowers between at least January 1, 2008 and December 30, 2010 that were from 100-228 basis points higher, on average, than the rates charged to similarly situated non-Hispanic white borrowers. These disparities are statistically significant.
15. The differences in interest rates charged to Hispanic borrowers and those charged to non-Hispanic white borrowers cannot be explained by factors unrelated to national origin.
16. The higher rates of interest that FDSB charged to Hispanic borrowers for unsecured consumer loans are a result of FDSB's policy or practice of giving its employees
One basis point represents one hundredth of a percentage point (0.0 1%).
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broad subjective discretion in setting the interest rate for unsecured consumer loan transactions. Information as to each applicant's national origin was available and known to the Bank's loan
officers, who personally handled each loan transaction at one of the Bank's branch offices.
FDSB did not properly instruct its loan officers regarding their obligation to treat prospective customers without regard to national origin, and the Bank has failed to supervise or monitor the
performance of its loan officers to ensure compliance with fair lending laws. 17. FDSB's policy or practice of giving its employees broad subjective discretion in
handling every aspect of the unsecured consumer loan transaction has had a disparate detrimental
impact on Hispanic borrowers compared to similarly situated non-Hispanic borrowers and is not justified by business necessity or legitimate business interests.
18. FDSB's actions, policies, and practices, as alleged herein, constitute
discrimination against applicants with respect to credit transactions on the basis of national origin in violation of ECOA.
19. FDSB's actions, policies, and practices, as alleged herein, constitute a pattern or
practice of resistance to the full enjoyment of rights secured by ECOA. 20. Persons who have been victims of FDSB's discriminatory actions, policies and
practices are affected persons as defined in ECOA, 15 U.S.C. § 1691 e, and have suffered injury
and damages as a result of FDSB's violation of ECOA. 21. FDSB 's pattern or practice of discrimination has been intentional, willful, and
implemented with reckless disregard for the rights of Hispanic borrowers.
WHEREFORE, the United States prays that the Court enter an ORDER that:
Declares that the policies and practices of the Defendant constitute violations of
the Equal Credit Opportunity Act, 15 U.S.C. § 1691-1691f;

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2. Enjoins the Defendant, its agents, employees, and successors, and all other

persons in active concert or participation with it, from:

a. Discriminating on the basis of national origin against any person with

respect to any aspect of a credit transaction;

b. Failing or refusing to take such affirmative steps as may be necessary to

restore, as nearly as practicable, the victims of the Defendant's unlawful conduct

to the position they would have been in but for the discriminatory conduct; and

c. Failing or refusing to take such actions as may be necessary to prevent the

recurrence of any such discriminatory conduct in the future.

3. Awards monetary damages, pursuant to 15 U.S.C. § 1691e(h), to all persons harmed by the Defendant's discriminatory policies and practices.

The United States further prays for such additional relief as the interests ofjustice may

require.

Dated:

tK ,2013

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Case 4:13-cv-00077-RAJ Document 1 Filed 12/19/13 Page 6 of 7
Respectfully submitted, ERIC H. HOLDER, JR Attorney General

ROBERT PITMAN United States Attorney
Western District of Texas
/5/ John Paniszczyn JOHN PANISZCZYN Civil Chief 601 N.W. Loop 410, Suite 600 San Antonio, TX 78216 Tel: (210) 384-7100 Fax: (210) 384-7312

Acting Assistant Attorney General Civil Rights Division
STEVEN . ROSENBAUM Chief Civil Rights Division Housing and Civil Enforcement Section
JON M. SEWARD Deputy Chief PATRICIA L. O'BEIRNE Trial Attorney
United States Department of Justice
Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, N.W. G St. Washington, DC 20530 Tel.: (202) 307-6264 Fax: (202) 514-1116 (fax) Patricia.O'Beirne@usdoi .gov

Case 4:13-cv-00077-RAJ Document 1 Filed 12/19/13 Page 7 of 7
CERTIFICATE OF SERVICE
I hereby certify that on 18 December 2013 a copy of the foregoing Complaint was sent via electronic mail transmission to the following counsel representing Defendant Fort Davis
State Bank:
Karen Neeley Cox Smith 111 Congress Avenue Suite 1800 Austin, Texas 78701 512-703-6300 kneeley@coxsmith.com
Patricia L. O'Beirne Trial Attorney United States Department of Justice

 Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 1 of 21

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS PECOS DIVISION

UNITED STATES OF AMERICA, Plaintiff,
v.
FORT DAVIS STATE BANK, Defendant.

)

)
)

)
)

NO.. CIVIL ACTION

'3- J- 77

)
)

)
)

I. INTRODUCTION

CONSENT ORDER

This Consent Order is submitted jointly by the parties for the approval of and entry by the

Court simultaneously with the filing of the United States' Complaint in this action. This Consent

Order resolves the claims of the United States that Fort Davis State Bank ("FDSB" or "the

Bank") has engaged in a pattern or practice of lending discrimination on the basis of national

origin in the pricing of unsecured consumer loans in violation of the Equal Credit Opportunity

Act (ECOA), 15 U.S.C. § 1691-1691f.

Under the provisions of the Consent Order, FDSB agrees to continue to utilize the
uniform pricing policies and procedures it has developed to ensure that the prices it charges for the loans covered by this Consent Order, including the portion of the price that reflects the discretion of the loan officer or any company employee, are set in a non-discriminatory manner consistent with the requirements of ECOA. FDSB also shall compensate Hispanic borrowers of unsecured consumer loans who may have suffered monetary damages as a result of the Bank's alleged violations of the ECOA.

Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 2 of 21
There has been no factual finding or adjudication with respect to any matter alleged by the United States. Accordingly, the execution of this Consent Order is not, and is not to be
considered as, an admission or finding of any violation of ECOA by FDSB. FDSB denies the
United States' allegations that it engaged in national origin discrimination. The parties have entered into this agreed Consent Order to resolve voluntarily the claims asserted by the United States in its Complaint to avoid the risks and burdens of litigation. The parties agree that full
implementation of the terms of this Consent Order shall provide a resolution of the allegations of the United States in a manner consistent with FDSB's legitimate business interests. II. BACKGROUND
FDSB is based in Fort Davis, Texas. It currently operates three branches one in Fort Davis, Texas, another branch in Alpine, Texas, and a third branch in Presidio, Texas. Until early 2013, it also operated a branch in Odessa, Texas. As of September 30, 2012, FDSB had assets of $78.5 million. The bank is owned by Fort Davis Bancshares, Inc., a one-bank holding company, also located in Fort Davis. FDSB is subject to the regulatory authority of the Federal Deposit Insurance Corporation (FDIC).
Beginning in December 2010, the FDIC conducted an examination of FDSB ' s lending
practices to evaluate its compliance with ECOA. During that examination, it identified potential
disparities in the Bank's pricing of unsecured consumer loans to Hispanic borrowers for loans
originated between November 1, 2009 and November 30, 2010. After further analysis, the FDIC found reason to believe that FDSB had engaged in a pattern or practice of discrimination on the basis of national origin against Hispanic borrowers, On August 22, 2011, pursuant to 15
U.S.C. 1691 e(g), the FDIC referred the lending practices of FDSB to the United States Department of Justice.

Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 3 of 21
After reviewing the information provided by the FDIC and conducting its own investigation, the United States contends that FDSB charged higher interest rates on unsecured consumer loans to Hispanic borrowers than to non-Hispanic borrowers from January 1, 2008 to
December 31, 2010. The Complaint alleges that during this time period, the higher rates of interest that FDSB charged to Hispanic borrowers were a result of FDSB 's policy or practice of
giving its employees broad subjective discretion in setting interest rates for unsecured consumer loan transactions. Although information as to each applicant's national origin was not solicited or noted in loan applications, such information was known to the Bank's loan officers, who
personally handled each loan transaction at one or more of FDSB's branch offices. The Complaint alleges that prior to January 1, 2011, PDSB did not properly instruct its loan officers regarding their obligation to treat prospective customers without regard to national origin, and the Bank allegedly failed to supervise or monitor the performance of its loan officers effectively to ensure compliance with fair lending laws, The Complaint alleges that prior to January 1, 2011, FDSB's policy or practice of giving its employees broad subjective discretion in handling every aspect of the unsecured consumer loan transaction was not justified by business necessity
or legitimate business interests.
III. TERMS OF CONSENT ORDER 1. Unless otherwise stated herein, the remedial provisions of this Consent Order
shall be implemented within ninety (90) days of the Effective Date of this Consent Order and shall continue throughout its term. The Effective Date of this Consent Order shall be the date on
which it is approved and entered by the Court.

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2. Unless otherwise stated herein, the types of loans covered by this Consent Order include automobile financing, home improvement loans, mortgage loans, and unsecured
consumer loans. A. General Prohibitory Iniunction
3. FDSB, including all of its officers, employees, agents, representatives, assignees, and all those in active concert or participation with any ofthem, is hereby enjoined from engaging in any act or practice that discriminates on the basis of national origin in any aspect of a credit transaction in violation of ECOA. This prohibition includes, but is not limited to: the adoption, performance, or implementation of any policy, practice, or act that results in national origin discrimination in the charging of loan prices, including the portion ofthe loan price that reflects the discretion of the loan officer or any other company employee, to those who borrow
money for loans covered by this Consent Order. 4. This Consent Order requires the Bank to take actions to remedy its alleged
discrimination, FDSB retains the discretion to take any additional actions that it believes are appropriate to achieve the goals of this Consent Order. Nothing in this Consent Order will require FDSB to make unsafe or unsound loans or to require loans to be originated or priced based upon the national origin of the borrower or prospective borrower. B. Pricing Policies and Procedures
5. In 2010, FDSB began to develop uniform pricing policies and procedures for unsecured consumer loans. FDSB has further revised these pricing policies to include, as applicable the following: (1) standards for collecting applications, current financial documents, and credit reports for all borrowers for the loans covered by this Consent Order; (2) standards for maintaining loan files for the loans covered by this Consent Order; and (3) a uniform pricing
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matrix or matrices for the loans covered by this Consent Order. Each uniform pricing matrix or matrices sets forth objective, non-discriminatory standards for determining interest rates for the loans covered by this Consent Order and includes: (i) limits on the amount by which the interest rate may deviate, either upward or downward, from the rate as determined by the matrix or matrices; (ii) the factors that a loan officer or bank official may consider in the exercise of that discretion; (iii) a requirement that each loan file must include written documentation of the factors set forth in the pricing matrix or matrices 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 independent approval ofthe adjusted rate by a senior officer; and (iv) a requirement that before an interest rate is fixed, loan officers must inform applicants in writing that the rate is determined by a variety of factors and may be negotiable within limits set by the loan policies.
6. FDSB shall require all loan officers and employees who originate loans covered by this Consent Order to comply with its pricing policies, once approved by the United States. FDSB also shall require an appropriate manager, under the supervision of a designated senior
official of the Bank, to review compliance with these requirements, including the existence of a
legitimate non-discriminatory reason for any disparities between Hispanic and non-I-Iispanic borrowers and steps to ensure that discretionary loan prices do not vary by national origin. Any loan that is not in compliance with these requirements may not be funded. In the event that a
loan inadvertently is funded in violation of the policies, an appropriate refund shall be provided to the borrower. All reviews shall be documented and kept in the loan files.
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C. Monitoring Program 7. FDSB shall have in place a monitoring program designed to ensure compliance
with this Consent Order. The program shall be designed to monitor the Bank's loans for potential disparities based on national origin. At a minimum, FDSB shall monitor the interest rates of its loan products covered by this Consent Order. The program also shall require a quarterly review by senior managers. Each such quarterly reyiew shall be documented and presented to FDSB ' s Board of Directors for review and approval not later than sixty (60) days after the end of each quarter. Each quarterly review shall include, but not be limited to, an analysis designed to detect interest rate disparities based on national origin with respect to the Bank's loan products covered by this Consent Order. The Bank shall use the 2000 Census surname lists published by the U.S. Census Bureau to identify borrower national origin for the purpose of compliance with this requirement.
a. In the event that any such review discloses interest rate disparities between Hispanic and non-Hispanic borrowers, FDSB shall attempt to determine the reason(s) for those disparities and shall promptly take corrective action to address disparities that are not justified by a legitimate business need. Corrective action shall include, as warranted, fmancial remediation for borrowers, further modifications to FDSB's pricing policies and/or monitoring programs as
appropriate, and education, discipline, or termination of employee(s). FDSB shall document all such disparities, determinations, and actions taken and shall provide a summary of the quarterly
reviews and any documentation and analysis relating thereto to the United States on a quarterly basis.
b. In the event that any such review discloses significant disparities with respect to any particular employee or branch, FDSB shall require the employee or branch manager to
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explain the non-discriminatory reason(s) for those disparities. If there is no reasonable, non-
national origin-based explanation for the noted disparities, FDSB shall require the employee or branch manager to take prompt conective action to address the disparities.
8. If the United States raises any objections to FDSB 's determinations or remedial
actions, the parties shall meet and confer to consider appropriate steps to address the concerns
raised by the United States' review. If the parties are unable to come to an agreement regarding
such objections, any party may bring the dispute to this Court for resolution.
D. Notification to the United States and Right to Object 9. FDSB shall provide a copy ofthe policies it utilizes to implement Paragraphs 5-6
ofthis Consent Order and descriptions of the monitoring programs required under Paragraphs 7 to the United States. Further, during the term of this Consent Order, FDSB may modify the
policies and monitoring programs described in Paragraphs 5-7. The United States shall have
thirty (30) days from receipt of the policies and descriptions or modifications thereof to raise any objections to them, and if it raises any, the parties shall confer to resolve their differences. In the event the parties are unable to do so, either party may bring the dispute to this Court for resolution. Until the Court resolves such a dispute, the policies or modifications thereof will not
go into effect.
E. Borrower Notices 10. FDSB shall post and prominently display in each location where loan applications
are received by the Bank a notice of non-discrimination (a sample of which is attached as
Appendix A).

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11. FDSB shall require its employees who originate loans covered by this Consent
Order to provide to the borrower a notice of non-discrimination that provides substantially the
same information as is contained in Appendix A. This disclosure shall be in writing, signed by the originator and the borrower (if the borrower executes), and submitted by the originator to be
made part of the loan file maintained by FDSB. This disclosure shall be made as early as practicable but not later than the time of the loan application.
F. Equal Credit Opportunity Training Program
12. FDSB shall continue to provide equal credit opportunity training to its management officials, loan officers, and any other employees or agents who participate in the
origination of the Bank's loans covered by this Consent Order. During this training, FDSB shall provide to each participant: (a) access to a copy of this Consent Order and the loan policies adopted pursuant to it; and (b) training on the terms ofthis Consent Order, the loan policies adopted pursuant to it, the requirements of ECOA, and his or her responsibilities under each. During the term of this Consent Order, FDSB shall provide annual training to covered employees
with respect to his or her responsibilities and obligations under ECOA and this Consent Order. FDSB shall bear all costs associated with the training.
13. FDSB shall secure from each employee or agelt specified in the preceding paragraph a signed statement acknowledging that he or she has received access to a copy of this
Consent Order and the loan policies and has completed the initial equal credit opportunity
training. The signature of the acknowledgement may be either manual or electronic. These statements shall be substantially in the form of Appendix B (Acknowledgment) and Appendix C (Equal Credit Opportunity Training). During the term of this Consent Order, each new employee

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or agent who participates in the origination of the Bank's loans covered by this Consent Order shall be provided access to a copy of this Consent Order and given an opportunity to have any questions answered, and shall sign the acknowledgment fonn statement (Appendix B) within ten (10) days of beginning his or her employment in that position.
G. Satisfaction of the United States' Claims for Monetary Relief 14. FDSB shall deposit in an interest-bearing escrow account the total sum of
$159,000 to compensate for monetary damages that aggrieved persons may have suffered as a
result of the alleged violations of ECOA with respect to unsecured consumer loans (the "Settlement Fund"). Title to this account shall be in the name of "FDSB Bank for the benefit of aggrieved persons pursuant to Consent Order of the Court in Civil Action No. [xxx]". FDSB shall provide written verification of the deposit to the United States within five (5) days of the Effective Date of this Consent Order. Any interest that accrues shall become part of the Settlement Fund and be utilized and disposed of as set forth herein.
15, Within thirty (30) days of the Effective Date of this Consent Order, the United States shall request any information it believes shall assist in identifying aggrieved persons and determining any damages. FDSB shall, within thirty (30) days of receipt of such request, supply, to the extent that it is within the Bank's control, such information as requested. Requested data
may be supplied as a supplement to the database already provided to the United States by the Bank in the course of the United States' inquiry. To the extent that the information is not within
FDSB 's control, the Bank shall, within thirty (30) days of receipt of such request, supply any
data in its control that identifies other parties that may have the information.

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16. The United States shall, upon reasonable notice, be allowed access to the Bank's records and files to verify the accuracy of the data provided and to otherwise identify persons entitled to the payments from the Settlement Fund.
17. Within ninety (90) days of the receipt ofthe information described in Paragraphs 16-17, the United States shall provide to FDSB a list of aggrieved persons and an amount each individual shall receive from the Sefflement Fund to compensate for monetary damages these persons may have suffered, subject to the conditions set forth in Paragraph 19. FDSB shall have sixty (60) days from receipt of such list in which to review the list and the United States shall consider in good faith any issues raised by the Bank.
18. Payments from the Settlement Fund to aggrieved persons shall be subject to the following conditions, provided that the details in administration of the Settlement Fund set forth in Paragraphs 20-21, can be modified by agreement of the parties and without further Court approval:
(a) No aggrieved person shall be paid any amount from the Settlement Fund until he or she has executed and delivered to FDSB a written release, as set forth in Appendix D, of all claims, legal or equitable, that he or she might have against the released persons and entities regarding the claims asserted by the United States in this lawsuit, so long as such claims accrued prior to the entry of this Consent Order; and
(b) The total amount paid by FDSB collectively to the aggrieved persons shall not exceed the amount of the Settlement Fund, including accrued interest.
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19. FDSB shall, no later than sixty (60) days afierreceiving the compensation list referred to in Paragraph 18, notify each identified person eligible for compensation by a letter (using its reasonable best efforts to locate each person). The form of this letter shall be subject to the review and approval of the United States. At a minimum, the letter shall state that the identified person is eligible for compensation in the indicated amount provided he or she executes and returns to the Bank a copy of the agreed-upon release, which release shall be enclosed with the notice along with an addressed and postage-paid return envelope, Each letter
shall identify the loan(s) the Bank originated to the identified person. If the parties are unable to agree on the tenns of the letter, any party may bring the dispute to the Court for resolution. Any
letters that are returned with a forwarding address shall promptly be re-sent to that new address.
FDSB shall provide an accounting of these notifications, indicating the name and address to
which each was dispatched, within the sixty (60) day period referred to in this paragraph.
20. FDSB shall issue checks in the amount indicated on the compensation list to all identified persons who execute and return the releases. FDSB shall issue and mail such checks no later than twenty-one (21) days after the receipt of the release. FDSB shall set forth reasonable deadlines for requirements of return of releases, and for the timely deposit of checks,
subject to approval of the United States, so that the compensation is distributed and checks are
presented for payment or become void prior to the date that is one year from the date the initial notifications are sent. For the twelve (12) month period after the initial notifications are sent to aggrieved persons pursuant to Paragraph 20, FDSB shall provide the United States with a monthly accounting of releases received, checks sent, and notifications for which no response has been received or that were reported to be undeliverable. The United States may make its own efforts to locate aggrieved persons.
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21. After the satisfaction of paragraphs 15-21, above, and the expiration of the
corresponding time periods, any money remaining in the Settlement Fund, including interest, shall be distributed to a qualified organization(s) for the purpose of providing services related to credit counseling, financial literacy, and other related educational programs targeted at Hispanic potential and former borrowers in communities where FDSB's branches are located. Before selecting the qualified organization(s), FDSB will obtain a proposal from the organization(s) on how the funds will be used consistent with the above-stated purpose, submit such proposal to
the United States, and consult with and obtain the non-objection of the United States. The United States and FDSB may request modification of the proposal before approving the
organization(s). The parties shall thereafter seek approval from the Court to distribute the remaining funds to the qualified organization(s).
FDSB shall also require that the qualified organization(s) receiving funds submit to FDSB and the United States a detailed report on how the funds are utilized within one year of receipt of funds, and every year thereafter until the funds are exhausted.
22. FDSB shall not be entitled a set-off, or any other reduction, of the amount of payments to aggrieved persons because of any debts owed by the identified persons. The Bank also shall not refuse to make a payment based on a release of legal claims or loan modification
previously signed by any aggrieved persons.
H. Complaint Resolution Program
23. During the period ofthis Consent Order, FDSB shall maintain a complaint
resolution program to address consumer complaints alleging discrimination regarding loans originated by the Bank. Documentation regarding this complaint resolution program, including
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documentation of individual complaints and resolutions, if ary, shall be made available to the
United States on a quarterly basis and included in the reports referenced in Paragraph 26. This program will not review complaints concerning the Settlement Fund provided by Paragraphs 1523. A person shall not be deemed ineligible for the complaint resolution program on the basis of having executed the release described in Paragraph 19(a), but there is no requirement under this Consent Order that any complaint necessarily be resolved for or against the Bank. IV. EVALUATING AND MONITORING COMPLIANCE
24. For the duration of this Consent Order, FDSB shall retain all records relating to its
obligations hereunder as well as its compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request. Such records may be maintained electronically.
25. Within six months of the effective date of this Consent Order, FDSB shall submit a report to the United States on the Bank's progress in establihing and implementing each of the
remedial items specified in this Consent Order. A second report shall be filed on the first anniversary of this Consent Order. Thereafter, FDSB shall submit a report annually for the term
of the Consent Order describing the actions taken in compliance with the provisions of the Consent Order. The report shall include an objective assessment ofthe extent to which each obligation was met, an explanation of why any particular component fell short of meeting the goal for that year, and any recommendations for additional actions to achieve the goals of this Consent Order. If applicable, FDSB shall attach to the annual reports representative copies of
training material disseminated pursuant to this Consent Order.
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V. ADMINISTRATION 26, The Consent Order shall terminate three (3) months after the submission of
FDSB's third annual report to the United States. Notwithstanding the above, this Consent Order may be extended upon further motion of the United States to the Court, for good cause shown.

27. Any time limits for performance fixed by this Consent Order may be extended by mutual written agreement of the parties. Other modifications to this Consent Order may be made
only upon approval of the Court, by motion by either party. The parties recognize that there may be changes in relevant and material factual circumstances during the term of this Consent Order that 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 Consent Order resulting
therefrom.

28. In the event that any disputes arise about the interpretation of or compliance with

the terms of this Consent Order, the parties shall endeavor in good faith to resolve any such

dispute between themselves before bringing it to this Court for resolution. The parties agree that

if it either reasonably believes that the other party failed to comply with any obligation under this

Consent Order, it shall provide written notice thereof and allow a period of at least thirty (30)

days to discuss a voluntary resolution of the alleged

before presenting the matter to this

Court. In the event of either a failure by FDSB to perform in a timely manner any act required

by this Consent Order or an act by FDSB, 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.

29. The parties agree that, as of the date of the entry of this Consent Order, litigation
is not "reasonably foreseeable" concerning the matters described above. To the extent that either
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The undersigned hereby apply for and consent to the entry of this Consent Order:

For the United States:
ROBERT PITMAN United States Attorney
Western District of Texas
Is! John Paniszczyn JOHN PANISZCZYN Civil Chief 601 N.W, Loop 410, Suite 600 San Antonio, TX 78216 Tel: (210) 384-7100 Fax: (210) 384-7312

JOCELYN SAMUELS Acting Assistan Attorney General
/LCivil Rights Divisio
STEVEN H. ROSENBAUM Chief Civil Rights Diyision Housing and Civil Enforcement Section

JON M. SEWARD Deputy Chief PATRICIA L. O'BEIRNE Trial Attorney
United States Department of Justice
Civil Rights Division Housing and Civil Enforcement Section
- 950 Pennsylvania Avenue, N.W. G St.
Washington, DC 20530 Tel.: (202) 307-6264 Fax: (202) 514-1116 (fax) Patricia.O'Beirne@usdoi .gov

For Fort Davis State Bank:

Cox Smith 111 Congress Avenue Suite 1800 Austin, Texas 78701 512-703-6300 512-703-6399 (fax)
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Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 17 of 21

APPENDIX A
We do Business in Accordance with
Federal Fair Lending Laws

UNDER THE EQUAL CREDIT OPPORTUNITY ACT, IT IS ILLEGAL TO DISCRIMINATE IN ANY
CREDIT TRANSACTION:

On the basis of race, color, national origin, religion, sex, marital status, or age;

Because income is from public assistance; or

Because a right has been exercised under the Federal Consumer Credit Protec;tion Laws.

IF YOU BELIEVE YOU HAVE BEEN
DISCRIMINATED AGAINST, YOU SHOULD SEND A COMPLAINT TO:

FDIC Consumer Response Center

OR

1100 Walnut Street, Box #11

Kansas City, MO 64106

Tel.: 1-877-275-3342

http ://www.fdic.gov/consumers/

U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section Washington, DC 20530 Tel: 1-800-896-7743 http://www,usdoj .gov/crtfhousing

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Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 18 of 21
APPENDIX B Officer and Employee Acknowledgment
I acknowledge that on ________________, I was provided copies of the Consent Order
entered by the Court in United States v. Fort Davis State Bank (W.D, Tex,), and the loan policies developed pursuant thereto. I have read and understand these documents and have had my questions about these documents answered. I believe I understand my legal responsibilities and shall comply with those responsibilities.
Signature Print Name Job Title Date
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Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 19 of 21
APPENDIX C Officer and Employee Training Certification
I certify that on ____________________, I received training with respect to my responsibilities under the Consent Order entered by the Cour in United States v. Fort Davis State Bank (W.D. Tex.), and the federal fair lending laws. I have had the opportunity to have my questions about them answered, I believe I understand my legal responsibilities not to discriminate under the federal fair lending laws, including the Equal Credit Opportunity Act, and shall comply with those responsibilities.
Signature Print Name Job Title Date
19

Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 20 of 21
APPENDIX D Release
In consideration for the parties' agreement to the terms of the Consent Order entered in United States v. Fort Davis State Bank (W.D. Tex,), and the payment to me of $__________ pursuant to the Consent Order and effective upon that payment, I hereby release and forever discharge all claims, rights, remedies, and recoveries related to the facts of credit discrimination in the origination of unsecured consumer loans at issue in the litigation referenced above, and
release and forever discharge all claims, rights, remedies, and recoveries arising from credit discrimination alleged in that litigation in connection with the origination of my loan(s), known
and unknown, up to and including the date of execution of this release,
I understand that this releases those claims, rights, remedies and recoveries against Fort Davis State Bank, and against any and all related entities, parents, predecessors, successors,
subsidiaries, and affiliates, and against any and all oftheir past and present directors, officers, agents, managers, supervisors, shareholders, and employees and their heirs, executors,
administrators, successors in interest, or assigns. Executed this day of_______
Signature
Print Name
Address
20
4920736.1

Case 4:13-cv-00077-RAJ Document 4 Filed 01/02/14 Page 21 of 21
CERTIFICATE OF SERVICE
I hereby certify that on 18 December 2013 a copy of the foregoing pleading was sent via electronic mail transmission to the following counsel of record:
Karen Neeley Cox Smith 111 Congress Avenue Suite 1800 Austin, Texas 78701 512-703-6300 kneeley@eoxsmith.com
Patricia L. O'Beirne Trial Attorney United States DepaPment of Justice

 Case: 4:13-cv-77 As of: 11/04/2018 03:45 PM CST 1 of 2
U.S. District Court [LIVE] Western District of Texas (Pecos) CIVIL DOCKET FOR CASE #: 4:13−cv−00077−RAJ

CLOSED

United States Of America v. Fort Davis State Bank Assigned to: Judge Robert A. Junell Cause: 15:1691 Equal Credit Opportunity Act
Plaintiff

Date Filed: 12/19/2013 Date Terminated: 11/05/2014 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Plaintiff

United States Of America

represented by John F. Paniszczyn U.S. Attorney's Office 601 N.W. Loop 410, #600 San Antonio, TX 78216−5512 (210) 384−7325 Fax: (210) 384−7312 Email: john.paniszczyn@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Patricia Lee O'Beirne United States Department of Justice − HCE 950 Pennsylvania Ave. N.W. − G St. Washington, DC 20530 202−307−6264 Email: Patricia.O'Beirne@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant Fort Davis State Bank

represented by Karen M. Neeley Cox Smith Matthews 111 Congress Avenue Suite 2800 Austin, TX 78701−4084 (512)703−6315 Fax: (512)703−6399 Email: kneeley@coxsmith.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 12/19/2013
12/19/2013
12/19/2013
01/02/2014 03/27/2014

# Docket Text
1 COMPLAINT, filed by United States Of America. (Attachments: # 1 Consent, # 2 Civil Cover Sheet)(jw) (Entered: 12/19/2013)
2 MOTION for entry of consent order by United States Of America. (jw) (Entered: 12/19/2013)
3 MOTION to Appear Pro Hac Vice by Patricia L. O'Beirne United States Of America. (jw) (Entered: 12/19/2013)
4 CONSENT ORDER. Signed by Judge Robert A. Junell. (rl) (Entered: 01/02/2014)
5 ORDER GRANTING 3 Motion to Appear Pro Hac Vice. Pursuant to our Administrative Policies and Procedures for Electronic Filing, the attorney hereby granted to practice pro hac vice in this case must register for electronic filing with our

Case: 4:13-cv-77 As of: 11/04/2018 03:45 PM CST 2 of 2

11/05/2014 10/03/2016 10/04/2016

court within 10 days of this order. Signed by Judge Robert A. Junell. (jw) (Entered: 03/27/2014)
6 ORDER DISMISSING CASE. Signed by Judge Robert A. Junell. (jw) (Entered: 11/07/2014)
7 Joint MOTION for Disbursement of Funds by United States Of America. (Attachments: # 1 Proposed Order)(O'Beirne, Patricia) (Entered: 10/03/2016)
8 ORDER GRANTING 7 Motion for Disbursement of Funds Signed by Judge Robert A. Junell. (mb1) (Entered: 10/04/2016)


Texas bank settles discriminatory lending suit with DOJ; agrees to new policies and pays damages  (W.D. Tex.).