On July 23, the U.S. District Court for the Eastern District of Pennsylvania denied the Department of Justice's motion to terminate a consent order requiring a Pennsylvania bank to implement a five-year fair lending remediation program. The DOJ had previously alleged that the bank violated the Fair Housing Act and the Equal Credit Opportunity Act by redlining majority-Black and Hispanic neighborhoods in the Philadelphia metropolitan area.
The DOJ argued that the early termination was appropriate because the bank had fully disbursed a $2.92 million loan subsidy fund, which it characterized as the most critical component of the agreement. The court rejected this view, finding that the remaining non-monetary obligations were essential to the consent order's purpose and had not yet been satisfied. Specifically, the court opinion concluded that the bank:
- Did not substantially comply with continuing obligations. The court found that the bank had only partially completed multi-year commitments around community partnerships, staff hiring, advertising, outreach, education, and fair lending program updates, all of which are central to the consent order.
- Failed to demonstrate a durable remedy. Despite claims of compliance, neither the DOJ nor the bank presented evidence that the risk of future redlining had been meaningfully mitigated. The court emphasized that the consent order's purpose—remedying alleged past discrimination and preventing recurrence—remains unfulfilled.
- Cannot rely on early fund disbursement as grounds for dismissal. The court noted that fully spending the loan subsidy fund was expected, not exceptional, and did not justify excusing the bank from the other binding commitments under the order.
- Would not face undue hardship from continued enforcement. The court determined that requiring the bank to continue complying with the order imposes no unreasonable burden, and the public benefits (i.e., advancing fair lending and protecting judicial integrity) outweigh any inconvenience.
Putting It Into Practice: Despite recent trends in which federal agencies have moved to roll back or terminate prior enforcement actions (previously discussed here, here, and here), courts have shown a willingness to push back. This decision makes clear that satisfying the monetary component of a consent order is not enough to warrant early termination when injunctive obligations remain incomplete. Institutions subject to ongoing oversight should proactively document their compliance efforts and engage transparently with regulators to demonstrate their good-faith adherence to any remedial commitments.
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