Fairway Independent Mortgage Corporation

Documents in this case

• Complaint · Oct. 2024 · 38 p.
• Consent order · Dec. 2024 · 27 p.

Case summary

On October 15, 2024, the Bureau, together with the United States Department of Justice (DOJ), filed a complaint and proposed consent order to resolve their allegations against Fairway Independent Mortgage Corporation (Fairway). Fairway is incorporated in Texas and headquartered in Madison, Wisconsin. Fairway acquired mortgage company, MortgageBanc, in 2009, and since 2009, Fairway has operated in the Birmingham-Hoover, AL Metropolitan Statistical Area (Birmingham MSA) under the trade name MortgageBanc. The Bureau’s and DOJ’s joint complaint alleged that Fairway engaged in unlawful discrimination against applicants and prospective applicants, including by redlining majority-Black and high-Black areas in the Birmingham MSA and engaging in acts and practices directed at applicants and prospective applicants that would discourage a reasonable person from making or pursuing an application for credit on the basis of race or color in violation of the Equal Credit Opportunity Act, Regulation B, and the Consumer Financial Protection Act of 2010. DOJ also alleged that Fairway’s conduct violated the Fair Housing Act. On December 3, 2024, the court entered the consent order which requires Fairway to invest $7 million in a loan subsidy program under which Fairway must offer home purchase, refinance, and home improvement loans on a more affordable basis than otherwise available for certain residential properties located in majority-Black neighborhoods in the Birmingham MSA. Fairway must also open or acquire a new loan production office or full-service retail office in a majority-Black neighborhood in the Birmingham MSA. Fairway must also spend at least $500,000 on advertising and outreach, at least $250,000 on consumer education, at least $250,000 on partnerships with one or more community-based or governmental organizations, and take other remedial steps, to serve the credit needs of majority-Black neighborhoods in the Birmingham MSA. Fairway must also pay a civil money penalty of $1.9 million.

Complaint (Oct. 2024)

PDF of this document (38 pages)

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

CONSUMER FINANCIAL PROTECTION BUREAU, and UNITED STATES OF AMERICA,

Plaintiffs,

v.

FAIRWAY INDEPENDENT MORTGAGE CORPORATION,

Defendant.

Civil Action No.

COMPLAINT AND JURY DEMAND

COMPLAINT

INTRODUCTION

1.

The Consumer Financial Protection Bureau (Bureau) and the United States of America (the United States) bring this action against Fairway Independent Mortgage Corporation (Fairway) under the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, ECOA’s implementing regulation (Regulation B), 12 C.F.R. part 1002, and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. § 5536(a)(1)(A), to remedy discrimination in Fairway’s mortgage lending. 2.

The FHA and ECOA prohibit creditors, such as non-depository mortgage companies, from discriminating in mortgage lending on the basis of race, color, and other prohibited bases. The FHA and its implementing regulations make it unlawful to discriminate against any person in making available residential real estate-related credit transactions, in

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making available or denying a dwelling, or in the terms, conditions, or privileges of sale of a dwelling or the provision of services in connection with such a sale, on the basis of race, color, and other characteristics. 42 U.S.C. §§ 3604(a)-(b), 3605(a); 24 C.F.R. §§ 100.110(b), 100.120. ECOA and Regulation B make it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of race, color, or other prohibited bases. ECOA and Regulation B also prohibit any statements, acts, or practices that would discourage on a prohibited basis an applicant or prospective applicant from making or pursuing an application for credit. 15 U.S.C. § 1691(a); 12 C.F.R. § 1002.4(b); 12 C.F.R. § 1002.4, Supp. I, ¶ 4(b)(1). 3.

From at least 2018 through 2022, Fairway engaged in a pattern or practice of unlawful discrimination against applicants and prospective applicants on the basis of race and color, including by redlining majority-Black areas in the Birmingham-Hoover, AL Metropolitan Statistical Area (Birmingham MSA) and engaging in acts and practices directed at applicants and prospective applicants that would discourage, on a prohibited basis, a reasonable person from making or pursuing an application for credit. For the purposes of this Complaint, “Black” refers to people who identified as Black or African American and “white” refers to people who identified as non-Hispanic and white.

4.

The acts and practices alleged in this Complaint occurred from at least 2018 through 2022, unless otherwise noted.

5.

“Redlining” is one type of discrimination prohibited under the FHA, ECOA, and Regulation B. Redlining occurs when lenders discourage credit applications, deny equal access to home loans and other credit services in certain areas, or avoid providing home loans and other

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credit services based on, for example, the race, national origin, or color of the residents of those areas.

6.

Fairway engaged in a pattern or practice of unlawful redlining and discouragement on a prohibited basis. Fairway’s redlining practices included locating and maintaining all of its physical retail locations and loan officers in majority-white areas and failing to locate any physical locations and loan officers in—or train, instruct, or incentivize its loan officers to effectively serve—majority-Black areas in the Birmingham MSA. 7.

Fairway predominantly directed its marketing and advertising to majority-white areas from 2018 through 2022, while failing to conduct effective marketing and advertising to majority-Black areas in the Birmingham MSA until at least late 2022. 8.

Fairway’s primary method of marketing and generating mortgage loan applications in the Birmingham MSA was through its loan officers’ relationships, including in their local communities. However, all of Fairway’s loan officers held themselves out as working out of offices located in majority-white areas and predominantly served these areas in generating mortgage loan applications. Further, Fairway’s loan officers largely failed to serve majority- Black areas and Fairway failed to effectively train or incentivize its existing loan officers to better serve majority-Black areas.

9.

Through these acts or practices, Fairway discriminated against, including by discouraging, applicants and prospective applicants on a prohibited basis, and as a result generated disproportionately low numbers of loan applications and mortgage loans from majority-Black areas in the Birmingham MSA compared to similarly situated lenders. 10.

Fairway’s conduct and practices were intended to deny, and had the effect of denying, equal access to mortgage loans for those residing in, or seeking credit for properties

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located in, majority-Black areas, and otherwise discouraged applicants and prospective applicants from making or pursuing applications for mortgage loans on the basis of the race or color of the residents of those areas. Fairway’s conduct was not justified by a legitimate, nondiscriminatory reason or business necessity and was not necessary to achieve a substantial, legitimate, non-discriminatory interest.

JURISDICTION AND VENUE 11.

This Court has subject-matter jurisdiction over this action because it is brought under federal laws, 12 U.S.C. § 5565(a)(1), 15 U.S.C. § 1691e(h), 42 U.S.C. § 3614(a), presents a federal question, 28 U.S.C. § 1331, and is brought by the United States and an agency of the United States, 28 U.S.C. § 1345.

12.

Venue is proper in this District under 28 U.S.C. § 1391 and 12 U.S.C. § 5564(f), because Fairway conducts business in, and a substantial part of the events or omissions giving rise to the claims occurred in, this judicial district.

PARTIES 13.

The Bureau is an independent agency of the United States created by the CFPA. 12 U.S.C. § 5491(a). The Bureau has independent litigating authority, including the authority to enforce the CFPA and ECOA. 12 U.S.C. §§ 5481(12)(D), (14), 5564(a)-(b). 14.

The United States brings this action to enforce the FHA and ECOA. The FHA and ECOA authorize the Attorney General to bring a civil action in federal district court whenever he has reason to believe that an entity is engaged in a pattern or practice of resistance to the full enjoyment of rights secured by the FHA and ECOA. 42 U.S.C. § 3614(a); 15 U.S.C. § 1691e(h). The FHA further authorizes the Attorney General to bring suit where the defendant has denied rights to a group of persons and that denial raises an issue of general public importance.

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42 U.S.C. § 3614(a). ECOA also authorizes the Attorney General to bring civil enforcement actions against creditors who have “engaged in a pattern or practice of discouraging or denying applications for credit” after referral from a responsible enforcement agency, such as the CFPB. 15 U.S.C. § 1691e(g)-(h).

15.

The Bureau made a referral to the Department of Justice pursuant to ECOA, 15 U.S.C. § 1691e(g).

16.

Fairway was incorporated in Texas in 1996 and is headquartered in Madison, Wisconsin.

17.

Fairway is a non-depository mortgage company that receives applications and originates mortgage loans throughout the United States, including in Birmingham, Alabama. 18.

Nationwide, Fairway generated the ninth most mortgage loan applications and originated the fifth most mortgage loans of all lenders based on 2022 HMDA data. 19.

For purposes of this Complaint, the term “mortgage loans” refers to loans that Fairway and other creditors must report under the Home Mortgage Disclosure Act (HMDA), 12 U.S.C. §§ 2801-2810, and “mortgage lending” refers to providing these loans. 20.

Fairway acquired a mortgage company, MortgageBanc, in the Birmingham MSA in 2009 and installed MortgageBanc’s prior leadership to oversee and operate its new location in the Birmingham MSA.

21.

Since 2009, Fairway has operated in the Birmingham MSA under the trade name—and prior company name—MortgageBanc.

22.

Fairway has maintained key MortgageBanc leadership to oversee its operations in the Birmingham MSA since 2009.

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23.

Fairway’s leadership in the Birmingham MSA made decisions about hiring, marketing, branch location(s), and business strategy for Fairway in the Birmingham MSA. 24.

Fairway has been a top-five lender by application volume in the Birmingham MSA.

25.

Fairway is subject to the FHA, ECOA, and their respective implementing regulations, 24 C.F.R. part 100 and 12 C.F.R. part 1002. 26.

Fairway is a “creditor” under ECOA, 15 U.S.C. § 1691a(e), and engaged in “residential real estate-related transactions” under the FHA, 42 U.S.C. § 3605. 27.

Fairway is a “covered person” under the CFPA. 12 U.S.C. § 5481(6)(A), (15)(A)(i).

FACTUAL ALLEGATIONS 28.

Fairway acted to meet the credit needs of majority-white areas while failing to serve the credit needs of majority-Black and high-Black areas in the Birmingham MSA. Fairway’s statements, acts, and practices directed at applicants and prospective applicants were discriminatory, including by discouraging applications for credit for properties located in majority-Black and high-Black areas in the Birmingham MSA. 29.

A “majority-Black” area comprises one or more census tracts in which more than 50% of the residents reported their race to the U.S. Census Bureau as Black or African American. A “high-Black” area comprises one or more census tracts in which more than 80% of the residents reported their race to the U.S. Census Bureau as Black or African American. A “majority-minority” area comprises one or more census tracts in which over 50% of the residents identified as Hispanic or as any race other than white, and includes majority-Black and high- Black areas. A “majority-white” area comprises census tracts in which more than 50% of the

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residents reported their race and ethnicity to the U.S. Census Bureau as white and not Hispanic. Unless otherwise specified, all demographic data discussed in this Complaint is based on 2015 through 2019 American Community Survey five-year estimate data from the U.S. Census Bureau, except that with respect to analysis of 2022 HMDA data, demographic data is based on 2020 Census data.

30.

The Birmingham MSA was comprised of six counties: Bibb, Blount, Chilton, Jefferson, Shelby, and St. Clair.

31.

As of 2019, the population of the Birmingham MSA was 1,085,330, of which 62% were white people, 30% were Black people, 5% were Hispanic people, and 3% were of another race or ethnicity.

32.

The Birmingham MSA comprised 245 populated census tracts, of which 81 (33%) were majority-Black.1 33.

Forty-five (18%) of the Birmingham MSA census tracts were high-Black as well as majority-Black.

34.

The population of the 81 majority-Black census tracts in the Birmingham MSA was 79% Black people, 15% Hispanic people, 4% white people, and 2% people of another race or ethnicity.

35.

All of the majority-Black and high-Black areas or census tracts were located in Jefferson County, which was home to over 60% of the Birmingham MSA population.

1 According to 2020 Census data for the Birmingham MSA, the population was 1,115,289, of which 59% were white people, 29% were Black people, 6% were Hispanic people, and 6% were of another race or ethnicity. Also based on 2020 Census data, there were 304 populated census tracts in the Birmingham MSA, of which 89 were majority- Black (29%) and 50 were high-Black (16%).

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36.

Jefferson County’s population was 659,680, of which 50% were white people, 43% were Black people, 4% were Hispanic people, and 3% were of another race or ethnicity. 37.

The other counties in the Birmingham MSA were all at least 75% white. Fairway Received Disproportionately Low Numbers of Mortgage Loan Applications from Majority-Black and High-Black Areas

38.

Fairway claims to serve the entire Birmingham MSA.

39.

However, Fairway’s lending demonstrated a pattern or practice of underserving and avoiding providing lending services in those areas of the MSA that are majority-Black and high-Black.

40.

Fairway’s acts and practices alleged herein—including the concentration of its retail and loan production offices, loan officers, marketing, and advertising in majority-white areas—have discriminated against, including by discouraging, applicants and prospective applicants seeking credit secured by properties in majority-Black and high-Black areas in the Birmingham MSA from applying for and obtaining mortgage loans and other mortgage related services.

41.

Publicly available data collected by the United States Census Bureau and Fairway’s own data on loan applications, which it is required to report under HMDA, confirms that from 2018 through 2022, Fairway disproportionately failed to serve majority-Black and high-Black areas in the Birmingham MSA.

42.

From 2018 through 2022, Fairway significantly underperformed as compared to similarly situated “peer” lenders in generating applications from majority-Black and high-Black areas as a percentage of the applications it generated in all areas in the Birmingham MSA. 43.

The disparity between the rate of applications generated by Fairway and the rate generated by its peer lenders from majority-Black and high-Black areas was both statistically

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significant—meaning unlikely to be caused by chance—and sizeable in every year from 2018 through 2022.

44.

Specifically, of the 10,247 HMDA-reportable mortgage applications that Fairway generated from 2018 through 2022 in the Birmingham MSA, only 3.7% were applications for properties in majority-Black areas. By contrast, Fairway’s peers generated 12.2% of their 70,712 applications from these same majority-Black areas. These disparities are statistically significant across the five-year period and in every year analyzed. 45.

In other words, from 2018 through 2022, Fairway’s peer lenders generated applications for properties in majority-Black areas at over three times the rate of Fairway. 46.

The disparity was even greater in high-Black areas for the same period. While only 0.5% of Fairway’s applications were for properties in high-Black areas, 4.5% of the peers’ applications were for properties in the same high-Black areas. These disparities are statistically significant across the five-year period and in every year analyzed. 47.

In other words, from 2018 through 2022, Fairway’s peer lenders generated applications for properties in high-Black areas at over eight times the rate of Fairway. 48.

Fairway also underperformed its peer lenders in generating applications from majority-minority areas as a percentage of the applications it generated in all areas in the Birmingham MSA, resulting in statistically significant disparities between the rate of applications generated by Fairway and the rate generated by its peer lenders in these areas in every year from 2018 through 2022.

49.

Even when Fairway generated applications for properties in majority-Black areas in the Birmingham MSA, the applicants themselves were less likely to be Black, based on HMDA data. In majority-Black areas, on average, only 41.4% of Fairway’s applications came

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from applicants identified as Black. By contrast, when Fairway’s peers generated applications from majority-Black areas, on average, 76.7% of their applications came from applicants identified as Black. These disparities are statistically significant. 50.

The statistically significant disparities between applications Fairway generated for properties in majority-Black and high-Black areas, and those that its peers generated, show that there were significant numbers of applicants seeking mortgage loans secured by properties in majority-Black and high-Black areas in Birmingham. Fairway had no legitimate, nondiscriminatory reason to draw so few applications from these areas. 51.

This data shows a statistically significant failure by Fairway to generate applications for mortgage loans from, and provide residential mortgage services to residents in, majority-Black and high-Black areas on a non-discriminatory basis when compared with similarly situated lenders from 2018 through 2022. See Exhibits A and B, which show from where Fairway drew mortgage loan applications in the Birmingham MSA. Fairway Made Disproportionately Low Numbers of Mortgage Loans in Majority-Black and High-Black Areas

52.

From 2018 through 2022, in addition to its underperformance in generating mortgage loan applications in majority-Black areas, Fairway significantly underperformed its peer lenders in making mortgage loans in majority-Black areas in the Birmingham MSA. 53.

The disparity between the rate of mortgage loans that Fairway made and the rate its peer lenders made in majority-Black and high-Black areas was both statistically significant— meaning unlikely to be caused by chance—and sizeable in every year from 2018 through 2022. 54.

Specifically, of the 7,913 HMDA-reportable loans that Fairway made from 2018 through 2022 in the Birmingham MSA, only 3.3% were for properties in majority-Black areas. By contrast, Fairway’s peers made 10.1% of their 43,371 loans for properties in these same

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majority-Black areas. These disparities are statistically significant across the five-year period and in every year analyzed.

55.

In other words, from 2018 through 2022, Fairway’s peer lenders made loans in majority-Black areas at more than three times the rate of Fairway. 56.

The disparity was even greater in high-Black areas for the same period. While only 0.4% of Fairway’s loans were for properties in high-Black areas, 3.3% of the peers’ loans were for properties in the same high-Black areas. These disparities are statistically significant across the five-year period and in every year analyzed. 57.

In other words, from 2018 through 2022, Fairway’s peer lenders made loans in high-Black areas at more than eight times the rate of Fairway. 58.

Fairway also underperformed its peer lenders in making mortgage loans in majority-minority areas as a percentage of the mortgage loans it made in all areas in the Birmingham MSA, resulting in statistically significant disparities between the rate that Fairway made mortgage loans in these areas and the rate that Fairway’s peer lenders made mortgage loans in these areas in every year from 2018 through 2022. 59.

Even when Fairway made loans in majority-Black areas in the Birmingham MSA, the borrowers themselves were less likely to be Black, based on HMDA data. In majority-Black areas, on average, 37.8% of Fairway’s loans were made to applicants identified as Black. By contrast, when Fairway’s peers made loans in majority-Black areas, on average, 74.2% of the loans were to borrowers identified as Black. These disparities are statistically significant. 60.

The statistically significant disparities between mortgage loans Fairway made in majority-Black and high-Black areas, and those that its peers made, show that there were significant numbers of qualified applicants seeking loans secured by properties in majority-Black

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and high-Black areas of Birmingham. Fairway had no legitimate, non-discriminatory reason to originate so few loans from these areas.

61.

This data shows a statistically significant failure by Fairway to make mortgage loans and provide residential mortgage services to borrowers with loans secured by properties in majority-Black and high-Black areas on a non-discriminatory basis when compared with similarly situated lenders from 2018 through 2022. See Exhibits C and D, which show where Fairway originated mortgage loans in the Birmingham MSA. Fairway Concentrated All of Its Retail Loan Offices in Majority-White Areas 62.

Fairway’s retail loan offices were located to serve the credit needs of residents in majority-white areas and avoid serving the credit needs of residents of majority-Black and high- Black areas in the Birmingham MSA.

63.

Within the time period of 2015 through 2022, Fairway operated three retail loan offices and three loan production desks located in real estate offices in the Birmingham MSA, all of which were in majority-white areas. See Exhibit E. 64.

Fairway’s leadership in the Birmingham MSA decided where to locate Fairway’s Birmingham MSA retail loan offices.

65.

Fairway has not maintained a retail loan office in Jefferson County, where all of the Birmingham MSA’s majority-Black and high-Black census tracts are located, since 2016. 66.

In 2016, Fairway moved its primary office, where most of its loan officers worked, from a majority-white area in southern Jefferson County to a majority-white area in Shelby County that was less than 12% Black.

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67.

From 2018 through 2022, Fairway maintained signs advertising its presence outside of its physical retail locations in the Birmingham MSA, none of which were in majority- Black areas.

68.

Fairway’s websites and 2018-2020 advertising materials also identified its retail office locations in the Birmingham MSA, and one website prominently displayed a map identifying its primary office location in a majority-white area. 69.

Fairway failed to take actions that effectively compensated for its lack of retail locations in majority-Black and high-Black areas in the Birmingham MSA. 70.

As of October 2022, Fairway’s leadership in the Birmingham MSA had not taken any actions specifically directed at increasing applications in majority-minority areas in the Birmingham MSA, which include majority-Black and high-Black areas. 71.

By locating all of its retail locations in majority-white areas in Shelby County, advertising those locations, and failing to take actions to effectively compensate for its physical locations, Fairway discouraged residents of majority-Black areas and high-Black areas in Jefferson County from applying for and obtaining mortgage loans from Fairway and restricted their access to credit in the Birmingham MSA.

Fairway’s Loan Officers and their Referral Sources Primarily Served Majority-White Areas and Largely Failed to Serve Majority-Black Areas

72.

Fairway’s loan officers primarily served the credit needs of majority-white areas but largely failed to serve the credit needs of majority-Black areas and high-Black areas in the Birmingham MSA.

73.

In the Birmingham MSA, all of Fairway’s loan officers worked or held themselves out as working out of Fairway’s retail office locations, all of which were located in majority-white areas.

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74.

Most of Fairway’s loan officers located in the Birmingham MSA were hired based on their relationships with the Birmingham branch’s senior vice president or vice president of business development, both of whom are white.

75.

As of October 2022, Fairway’s leadership in the Birmingham MSA lacked a strategy for recruiting new mortgage loan officers, such as hiring new loan officers with experience in serving, or ties to referral sources in, majority-Black areas and high-Black areas in the Birmingham MSA.

76.

Fairway’s primary method of marketing and generating mortgage loan applications in the Birmingham MSA was through its loan officers’ referral sources of real estate agents and builders, current and former customers, and individuals in their churches, local schools, family, and social organizations.

77.

The vast majority of Fairway’s referrals of applicants or prospective applicants came from referral sources located in majority-white areas in the Birmingham MSA; indeed, less than 3% of Fairway’s referrals were from referral sources in majority-Black areas, and less than 1% were from high-Black areas, based on Fairway’s own referral data. 78.

In the Birmingham MSA, Fairway failed to be effective in generating applications in majority-Black areas and high-Black areas or effectively train or incentivize its existing loan officers to better serve majority-Black and high-Black areas. 79.

And, despite primarily relying on its loan officers’ referral sources, Fairway failed to effectively monitor whether these particular referral sources were leading to referrals and applications that excluded majority-Black areas and high-Black areas in the Birmingham MSA. 80.

As a result of Fairway’s strategy of relying on its loan officers’ referral relationships, the vast majority of all applicants and prospective applicants referred to Fairway

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lived in majority-white areas in the Birmingham MSA; in fact, less than 8% lived in majority- Black areas and less than 3% lived in high-Black areas, based on Fairway’s own referral data. 81.

Fairway’s marketing strategy of relying on its loan officers’ referral sources in the Birmingham MSA was ineffective in generating applications in majority-Black areas and high- Black areas in the Birmingham MSA.

Fairway’s Marketing Was Predominantly Directed to Majority-White Areas and Not Directed to Majority-Black Areas and High-Black Areas

82.

Fairway’s marketing in the Birmingham MSA was largely driven by the Birmingham branch’s senior vice president and loan officers. 83.

Images of Fairway’s loan officers and other employees in the Birmingham MSA were displayed on Fairway’s websites, in marketing materials including on social media, and, at times, even in loan officer signature blocks in emails. 84.

These images in Fairway’s marketing materials depicted Fairway’s employees in the Birmingham MSA, nearly all of whom were white and none of whom were Black. 85.

Fairway identified about 565 digital or print advertisements that it used from 2018 through 2020 in the Birmingham MSA, of which about 200 were used for direct-mail campaigns and the remainder were used for other advertising, such as digital advertising. 86.

About 300 of these advertisements contained an image of a person, such as a loan officer, a real estate agent, or a model, with about 99% containing at least one image of a person who appeared to be white and only about 11% containing an image of a person who appeared to be Black.

87.

Fairway’s direct-mail advertising campaigns in the Birmingham MSA resulted in over 20,000 individual direct mailings being sent to identified addresses from 2018-2020 (direct

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mailings), of which 15,000 contained an image of a person, such as a loan officer, model, or real estate agent.

88.

Of those over 15,000 direct mailings showing images of a person, only about 150 mailings contained an image of someone who appeared to be other than white (about 1%). 89.

Further, from at least 2018 through at least 2020, Fairway’s fair lending policy required review of its marketing for fair lending compliance, including to ensure that “the marketing material’s audience includes all consumers and does not exclude consumers” on a prohibited basis.

90.

Despite its policy, Fairway did not require compliance personnel to review the geographic area where its proposed marketing materials were to be distributed. 91.

As a result, of the over 20,000 direct mailings that Fairway sent to an identified address in the Birmingham MSA from 2018 through 2020, less than 3% were sent to a majority- Black area and less than 0.5% were sent to a high-Black area in the Birmingham MSA, even though 33% of census tracts in the Birmingham MSA are majority-Black tracts. See Exhibit F. 92.

In addition to the direct mailings, Fairway specifically directed dozens of other types of marketing to majority-white zip codes, neighborhoods, or areas in the Birmingham MSA, while none of this marketing was directed specifically to majority-Black or high-Black zip codes, neighborhoods, or areas in the Birmingham MSA. 93.

In 2018 and 2019, one of Fairway’s largest marketing expenditures in the Birmingham MSA was pursuant to marketing services agreements with two real estate companies, ARC Realty and LIST Birmingham.

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94.

These marketing services agreements provided that the real estate companies would display Fairway marketing materials at their listings, in their offices, on their websites, and through direct mailings.

95.

The real estate offices that displayed Fairway marketing materials under these agreements were both located in majority-white areas in the Birmingham MSA. 96.

Additionally, one of the real estate companies provided Fairway with periodic reports identifying the listing addresses where it displayed Fairway’s marketing materials. The overwhelming majority of verifiable listing addresses were located in majority-white areas. 97.

Despite receiving information about these listing addresses, Fairway took no action to ensure that either real estate company also displayed Fairway’s marketing materials at listing addresses located in majority-Black areas. 98.

From 2018 through 2022 in the Birmingham MSA, Fairway also directed significant marketing and advertising expenditures at the members of a country club, an annual charity event, a fitness center, middle school, and a religious college. 99.

The country club, annual charity event, fitness center, middle school, and religious college were all located in majority-white areas. 100. Fairway predominantly directed mail and other marketing and advertising to majority-white areas, and also directed almost no advertising specifically at majority-Black areas and high-Black areas.

Fairway Failed to Improve Lending in Majority-Black Areas 101.

Fairway’s own data showed that it was failing to adequately serve majority-Black and high-Black areas in the Birmingham MSA. Since at least 2017, Fairway has used third-party

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vendors to assist in reviewing HMDA-reportable data to evaluate its redlining risk in majorityminority areas. Areas identified as majority-minority would include all majority-Black areas. 102.

Since at least 2017, Fairway provided its Board of Directors, Chief Executive Officer, and other members of its Executive Committee with updates on the status of its fair lending monitoring, including the results of Fairway’s annual monitoring for redlining risk. 103.

The results of Fairway’s annual monitoring for redlining risk should have put Fairway on notice that it was failing to adequately serve majority-Black and high-Black areas in the Birmingham MSA.

104.

For years, Fairway failed to meaningfully address HMDA-reportable data showing that Fairway was underserving majority-minority and majority-Black areas in the Birmingham MSA.

105.

Before September 2022, at the earliest, Fairway failed to take any meaningful actions directed at increasing its applications and originations in majority-Black areas in the Birmingham MSA.

106.

As of October 2022, Fairway’s Birmingham branch leadership had still not taken any steps to address redlining risk in the Birmingham MSA, other than telling loan officers not to discriminate.

107.

Despite having knowledge that it was failing to serve majority-minority and majority-Black areas in the Birmingham MSA, Fairway failed to adopt a written plan for marketing or growth to address this concern.

108.

From at least 2018 through 2022, Fairway failed to meaningfully increase the percentage of its applications that it generates, and the loans it makes, in majority-Black and high-Black areas as compared to other lenders based on HMDA data.

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109.

The totality of Fairway’s acts, policies, and practices described herein constitute unlawful discrimination, including by discouragement and redlining of majority-Black and high- Black areas in the Birmingham MSA.

110.

Fairway engaged in acts or practices that, together and separately, discriminated against applicants and prospective applicants on the basis of the race or color of the residents of majority-Black and high-Black areas in the Birmingham MSA, including by redlining and discouraging them from seeking or obtaining credit from Fairway. 111.

Fairway’s discriminatory practices as described herein were intended to deny and discourage, and had the effect of denying and discouraging, equal access to home loans on the basis of race or color.

Fairway Employees Exchanged Emails Using Derogatory or Discriminatory Language to Refer to Majority-Black Areas and a Black Applicant

112.

From at least 2018 through 2020, several of Fairway’s employees, all of whom were white, sent and received emails via their Fairway email accounts using derogatory language to refer to majority-Black or high-Black areas in the Birmingham MSA, indicating a culture consistent with discrimination, including by discouraging applications for credit for properties in these areas.

113.

In a May 2020 email chain between a top-producing loan officer for Fairway in the Birmingham MSA and a Fairway loan processor, the loan officer wrote in the context of purchasing a property, “Ensley is the GHETTO. We don’t own a house there I promise. LOL!” The Fairway processor responded “ROFLOL,” presumably meaning “rolling on the floor

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laughing out loud.” Ensley is a high-Black area in Birmingham from which Fairway drew zero mortgage loan applications from 2018-2021.

114.

In an April 2018 email chain, a Fairway mortgage closer emailed a Fairway loan officer, both of whom worked in the Birmingham MSA, and referred to the “Tarrant ghetto” in the subject line of the email. Tarrant is located in a majority-Black area in Birmingham from which Fairway drew zero mortgage loan applications from 2018-2021. 115.

In a 2018 email chain between two Fairway loan officers, one of the loan officers, who was a top-producing loan officer in the Birmingham MSA, referred to an applicant’s friends as “thug friends” and wrote of the applicant, “[w]e don’t need him as a client. He is a liability waiting to happen.” The loan officer then wrote, “I referred him to a Realtor in [T]russville [. . .] he showed up drunk with 4 of his thug friends and showed [h]is ass.” The email exchange does not include an explicit reference to the person’s race, but data provided by Fairway shows that the person applied for a loan with Fairway, was identified as African American, and withdrew his application in 2018.

COUNT I: VIOLATIONS OF THE FAIR HOUSING ACT (By the United States of America)

116.

The United States incorporates all prior paragraphs of the Complaint as if fully set forth herein.

117.

Fairway’s policies and practices constitute the unlawful redlining of majority- Black areas and high-Black areas in the Birmingham MSA on account of the race or color of residents in those areas. Fairway’s policies and practices were intended to deny, and had the effect of denying, equal access to home loans to residents of majority-Black and high-Black

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areas and those seeking credit for properties located in those areas. Fairway’s conduct was not justified by business necessity or legitimate business considerations. 118.

Fairway’s actions alleged herein constitute:

a. Discrimination on the basis of race or color in making available residential real estate-related transactions, or in the terms or conditions of residential real estate-related transactions, in violation of the Fair Housing Act, 42 U.S.C. § 3605(a), and its implementing regulation, 24 C.F.R. §§ 100.110(b), 100.120; b. The making unavailable or denial of dwellings to persons because of race or color in violation of the Fair Housing Act, 42 U.S.C. § 3604(a), and its implementing regulation, 24 C.F.R. § 100.50(b)(3); and c. Discrimination on the basis of race or color in the terms, conditions, or privileges of the sale or rental of dwellings, or the provision of services or facilities in connection with the sale or rental of dwellings, in violation of the Fair Housing Act, 42 U.S.C. § 3604(b), and its implementing regulation, 24 C.F.R. §§ 100.50(b)(2), 100.65.

119.

Fairway’s policies and practices alleged herein constitute, in violation of 42 U.S.C. § 3614(a):

a. A pattern or practice of resistance to the full enjoyment of rights secured by the FHA; and b. A denial of rights granted by the FHA to a group of persons that raises an issue of general importance.

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120.

Fairway’s pattern or practice of discrimination was intentional and willful and was implemented with reckless disregard for the rights of individuals based on their race or color.

121.

Persons who have been victims of Fairway’s discriminatory policies and practices are “aggrieved” as defined in 42 U.S.C. § 3602(i), and may have suffered damages as a result of the Fairway’s conduct in violation of the FHA, as described above. COUNT II: VIOLATIONS OF THE EQUAL CREDIT OPPORTUNITY ACT (By the Consumer Financial Protection Bureau and the United States of America)

122.

The Bureau and United States incorporate paragraphs 1-115 of this Complaint as if fully set forth herein.

123.

Fairway’s acts, policies, and practices as alleged herein constitute unlawful discrimination against applicants and prospective applicants, including by redlining majority- Black and high-Black areas in the Birmingham MSA and engaging in acts and practices directed at applicants and prospective applicants that would discourage a reasonable person from making or pursuing an application for credit on the basis of race or color in violation of ECOA and Regulation B. 15 U.S.C. § 1691(a); 12 C.F.R. § 1002.4(a)-(b). 124.

Fairway’s policies and practices as alleged herein constitute a pattern or practice of discrimination and resistance to the full enjoyment of rights secured by ECOA, in violation of ECOA. 15 U.S.C. § 1691e(h).

125.

Fairway’s pattern or practice of discrimination was intentional and willful and was implemented with reckless disregard for the rights of individuals based on their race or color.

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126.

Persons who have been victims of Fairway’s discriminatory policies and practices are aggrieved and may have suffered damages as a result of Fairway’s conduct in violation of ECOA as described above.

COUNT III: VIOLATION OF THE CONSUMER FINANCIAL PROTECTION ACT (By the Consumer Financial Protection Bureau)

127.

The Bureau incorporates paragraphs 1-115 and 122-126 of this Complaint as if fully set forth herein.

128.

Section 1036(a)(1)(A) of the CFPA prohibits a covered person from offering or providing to a consumer any financial product or service not in conformity with “Federal consumer financial law” or otherwise committing any act or omission in violation of a “Federal consumer financial law.” 12 U.S.C. § 5536(a)(1)(A). 129.

ECOA is a Federal consumer financial law. 12 U.S.C. § 5481(12)(D), (14). 130.

Fairway’s ECOA violations, described above in Count II, constitute violations of section 1036(a)(1)(A) of the CFPA. 12 U.S.C. § 5536(a)(1)(A); 15 U.S.C. § 1691c(b). DEMAND FOR RELIEF Wherefore, the Bureau and United States request that the Court enter an order that: (1) Declares that Fairway’s acts and practices violate the FHA. 42 U.S.C. §§ 3601-3619;

(2) Declares that Fairway’s acts and practices violate ECOA. 15 U.S.C. §§ 1691-1691f;

(3) Declares that Fairway’s acts and practices violate the CFPA. 12 U.S.C. § 5536(a)(1)(A);

(4) Enjoins Fairway, its agents, employees, successors, and all others in active

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concert or participation with Fairway, from:

a. Discriminating on account of race or color in any aspect of their lending business practices;

b. Discouraging applicants or prospective applicants from making or pursuing an application for credit on account of race or color; c. Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of Fairway’s unlawful practices to the position they would be in but for the discriminatory conduct; and d. Failing or refusing to take such affirmative steps as may be necessary to prevent the recurrence of any discriminatory conduct in the future and to eliminate, to the extent practicable, the effects of Fairway’s unlawful practices, and provide policies and procedures to ensure all segments of Fairway’s market areas are served without regard to prohibited characteristics; (5) Awards damages, restitution, equitable, and other monetary relief, under 42 U.S.C. § 3614(d)(1)(B), 15 U.S.C. §§ 1691c(a)(9) and 1691e(h), and 12 U.S.C. § 5565; (6) Assesses a civil penalty against Fairway in an amount authorized by 12 U.S.C. § 5565(c) and 42 U.S.C. § 3614(d)(1)(C); and (7) Awards Plaintiffs such additional relief as the interests of justice may require. DEMAND FOR A JURY TRIAL The Bureau and United States demand a trial by jury in this action on all issues so triable.

Dated: October 15, 2024

Respectfully submitted,

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FOR THE CONSUMER FINANCIAL PROTECTION BUREAU: ERIC HALPERIN Enforcement Director

DEBORAH MORRIS Deputy Enforcement Director

EMILY SACHS Assistant Deputy Enforcement Director

s/Jesse Stewart _ Jesse Stewart NY Bar No. 5145495 Tiffany Hardy NY Bar No. 4074142 Attorneys for Plaintiff Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20552 Telephone: 202-430-0628 Facsimile: 202-435-5468 Email: [email protected] Email: [email protected]

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FOR THE UNITED STATES OF AMERICA:

PRIM F. ESCALONA United States Attorney

JASON R. CHEEK Chief, Civil Division

/s/ Carla C. Ward _ CARLA C. WARD [email protected] New York Bar #4494779 Deputy Chief, Civil Division U.S. Attorney’s Office Northern District of Alabama 1801 4TH ST., NORTH Birmingham, AL 35203 (205) 244-2185

MERRICK B. GARLAND Attorney General

KRISTEN CLARKE Assistant Attorney General Civil Rights Division

CARRIE PAGNUCCO Chief

VARDA HUSSAIN Principal Deputy Chief

/s/ Sara L. Niles _ SARA L. NILES [email protected] Massachusetts Bar #634257 TERRENCE K. MANGAN [email protected] Maryland Bar #2006010006 Trial Attorneys Housing and Civil Enforcement Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Ave. NW – 4CON Washington, DC 20530 (202) 514-4713

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Complaint Exhibit A

Page 29

Shelby Jefferson Bibb Chilton Blount St. Clair Esri, HERE, JeffCoAL, Esri, HERE, Garmin, GeoTechnologies, Inc., USGS, EPA Fairway Independent Mortgage Corp. Applications 2018-2021 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Legend 1 Dot = 1 Application Birmingham, AL MSA County Boundaries 2019 American Community Survey Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100%

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Complaint Exhibit B

Page 31

Shelby Jefferson Bibb Chilton Blount St. Clair JeffCoAL, Esri, HERE, Garmin, USGS, EPA, NPS, Esri, HERE, NPS Fairway Independent Mortgage Corp. Applications 2022 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Legend 1 Dot = 1 Application Birmingham, AL MSA County Boundaries 2020 Census Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100%

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Complaint Exhibit C

Page 33

Shelby Jefferson Bibb Chilton Blount St. Clair Esri, HERE, JeffCoAL, Esri, HERE, Garmin, GeoTechnologies, Inc., USGS, EPA Fairway Independent Mortgage Corp. Originations 2018-2021 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Legend 1 Dot = 1 Origination Birmingham, AL MSA County Boundaries 2019 American Community Survey Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100%

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Complaint Exhibit D

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Shelby Jefferson Bibb Chilton Blount St. Clair Esri, HERE, JeffCoAL, Esri, HERE, Garmin, GeoTechnologies, Inc., USGS, EPA Fairway Independent Mortgage Corp. Originations 2022 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Legend 1 Dot = 1 Origination Birmingham, AL MSA County Boundaries 2020 Census Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100%

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Complaint Exhibit E

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Shelby Jefferson Bibb Chilton Blount St. Clair Esri, HERE, JeffCoAL, Esri, HERE, Garmin, GeoTechnologies, Inc., USGS, EPA Fairway Independent Mortgage Corp. Retail Locations 2015-2022 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Birmingham, AL MSA County Boundaries 2019 American Community Survey Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100% Retail Locations Retail Loan Office - Open 2016 to Present Retail Loan Office - Closed Retail Loan Office - Closed Loan Production Desk - Closed 2016

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Complaint Exhibit F

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Shelby Jefferson Bibb Chilton Blount St. Clair Esri, HERE, JeffCoAL, Esri, HERE, Garmin, GeoTechnologies, Inc., USGS, EPA Fairway Independent Mortgage Corp. Direct Mail Advertising 2018-2020 Birmingham, AL MSA 2.5 Miles Prepared by:

U.S. Department of Justice Civil Rights Division Washington, D.C. 20530 Direct Mail Advertisement Birmingham, AL MSA County Boundaries 2019 American Community Survey Percent Black and High-Black by Tract 0% - 50% 50.01% - 80% 80.01% - 100%

Consent order (Dec. 2024)

PDF of this document (27 pages)

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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA

CONSUMER FINANCIAL PROTECTION BUREAU, and UNITED STATES OF AMERICA, Plaintiffs,

v.

FAIRWAY INDEPENDENT MORTGAGE CORPORATION, Defendant.

Civil Action No. 2:24-cv-01405-AMM

CONSENT ORDER

INTRODUCTION The Consumer Financial Protection Bureau (Bureau) and United States of America (United States) (together, Plaintiffs) commenced this civil action to obtain injunctive and monetary relief and civil penalties from Fairway Independent Mortgage Corporation (Defendant or Fairway). The Complaint alleges violations of the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. § 5536(a)(1)(A), in connection with Fairway’s mortgage lending in the Birmingham-Hoover, Alabama, Metropolitan Statistical Area. Plaintiffs allege that Fairway unlawfully discriminated by redlining majority-Black areas in the Birmingham-Hoover, AL Metropolitan Statistical Area in its residential mortgage lending. FILED 2024 Dec-03 PM 04:12 U.S. DISTRICT COURT N.D. OF ALABAMA Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 1 of 27

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The Bureau, the United States, and Defendant agree to entry of this Consent Order (Order), without adjudication of any issue of fact or law, to settle and resolve all matters in dispute arising from the conduct alleged in the Complaint. FINDINGS 1.

This Court has jurisdiction over the parties and the subject matter of this action. 2.

Fairway neither admits nor denies the allegations in the Complaint, except as specified in this Order. For purposes of this Order, Fairway admits the facts necessary to establish this Court’s personal jurisdiction over Fairway and the subject matter jurisdiction related to the Lawsuit Subject Matter.

3.

Fairway waives all rights to seek judicial review or otherwise challenge or contest the validity of this Order and any claim it may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order. Each party agrees to bear its own costs and expenses, including, without limitation, attorneys’ fees. 4.

Entry of this Order is in the public interest.

DEFINITIONS 5.

The following definitions apply to this Order:

a. “Birmingham MSA” means the Birmingham-Hoover, Alabama, Metropolitan Statistical Area, which for purposes of this Order encompasses Bibb, Blount, Chilton, Jefferson, Shelby, and St. Clair Counties. b. “Board” means Fairway’s duly elected and acting Board of Directors. c. “Bureau” means the Consumer Financial Protection Bureau. d. “Covered Staff and Official” means:

Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 2 of 27

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i. all Fairway employees with substantive involvement in Fairway’s activities related to the Lawsuit Subject Matter; ii. senior management with oversight over marketing and compliance with the FHA and ECOA; and iii. members of the Board.

e. “Defendant or Fairway” means Fairway Independent Mortgage Corporation, including its trade name MortgageBanc and any other names by which it might be known, and its successors and assigns. f. “Effective Date” means the date on which the Order is entered by the Court. g. “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Bureau, or their delegate. h. “Lawsuit Subject Matter” means the allegation that Fairway violated the FHA, ECOA, and/or the CFPA in connection with Fairway's residential mortgage lending in the Birmingham MSA through unlawful discrimination by redlining Majority-Black Neighborhoods.

i. “Majority-Black Neighborhood” means a census tract in the Birmingham MSA in which more than 50% of the residents are identified as Black or African American based on the 2020 U.S. Census. j. “Plaintiffs” means the Consumer Financial Protection Bureau and the United States of America.

k. “Qualified Applicant” means an applicant who applies for a mortgage loan for a residential property located in a Majority-Black Neighborhood that will serve as the applicant’s principal residence and is qualified for a mortgage Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 3 of 27

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under the underwriting standards that Fairway applies to the mortgage loans it originates.

l. “Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Fairway based on the Lawsuit Subject Matter. m. “Supervision Director” means the Assistant Director of the Office of Supervision for the Consumer Financial Protection Bureau, or their delegate. CONDUCT PROVISIONS I Prohibited Conduct IT IS ORDERED that:

6.

Fairway and its officers, agents, servants, employees, and all other persons in active concert or participation with them who have actual notice of this Order, whether acting directly or indirectly, is permanently restrained from discriminating by engaging in acts or practices that constitute redlining of Majority-Black Neighborhoods in the Birmingham MSA. Nothing in this Order shall be read as an exception to this Paragraph. II Credit Needs Assessment and Remedial Plan IT IS FURTHER ORDERED that:

7.

Fairway must submit to Plaintiffs for non-objection a credit needs assessment for Majority-Black Neighborhoods in the Birmingham MSA (Credit Needs Assessment). A Credit Needs Assessment is a research-based market study that identifies for a lender the needs for financial services in a geographic area.

Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 4 of 27

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8.

The Credit Needs Assessment must include:

a. an analysis of recent available demographic and socioeconomic data describing Majority-Black Neighborhoods;

b. an evaluation (to include market research and interviews) of the residential mortgage credit needs of, and corresponding lending opportunities in, Majority-Black Neighborhoods, including, but not limited to, the need for purchase, refinance, and home improvement loans, and the need for and feasibility of alternative mortgage products and programs that Fairway does not currently offer in the Birmingham MSA;

c. an assessment of potentially appropriate new retail office locations and hours of operation in Majority-Black Neighborhoods; d. a review of the availability and feasibility of relevant federal, state, and local government programs that are available to Qualified Applicants seeking and obtaining residential mortgage loans in the Birmingham MSA; e. meetings with representatives of community organizations involved in promoting fair lending, home ownership, or residential development in affected Majority-Black Neighborhoods;

f. potential strategies for how Fairway can provide residential mortgage loan products and services to Qualified Applicants in Majority-Black Neighborhoods; and g. recommendations that address how each requirement of the Order set forth in Sections III through IX should be carried out to best achieve the remedial goals of this Order, including the number of annual outreach and advertising Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 5 of 27

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events that Fairway should conduct to best increase applications for credit secured by properties in majority-Black Neighborhoods.

9.

The Credit Needs Assessment must be conducted by an independent, qualified third-party consultant(s) selected by Fairway and subject to non-objection by Plaintiffs. Within 30 days of the Effective Date, Fairway must submit to Plaintiffs for non-objection the name(s) and qualifications of the third-party consultant(s) and a statement of work for the consultant(s) describing their proposed methodology for conducting the Credit Needs Assessment. If Plaintiffs object to the selected third-party consultant(s) and/or the statement of work, within 15 days of Plaintiffs’ objection, Fairway must propose a new third-party consultant(s) and submit their qualifications to Plaintiffs for non-objection and/or revise and resubmit the statement of work. 10.

Within 90 days of Plaintiffs’ written notice of non-objection regarding the thirdparty consultant and statement of work, Fairway must submit the Credit Needs Assessment described in Paragraphs 7-8 to Plaintiffs for non-objection. If Plaintiffs object to any portion of the Credit Needs Assessment, Fairway must take appropriate corrective action and resubmit the Credit Needs Assessment within 15 days of receiving the objection. Within 10 days of Plaintiffs’ written notice of non-objection to the Credit Needs Assessment, Fairway must distribute a copy of the Credit Needs Assessment to all Covered Staff and Officials. 11.

Within 60 days of Plaintiffs’ written notice of non-objection to the Credit Needs Assessment, Fairway must submit a remedial plan that details, in light of the recommendations made in the Credit Needs Assessment, the actions Fairway proposes to take to comply with each requirement of this Order set forth in Sections III through IX (e.g., loan subsidy, community partnerships, and advertising) (Remedial Plan), including the percentage of the subsidy fund Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 6 of 27

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provided through the Loan Subsidy Program set forth in Section VI that must be applied to home purchase loans.

12.

The Remedial Plan must also include:

a. the steps Fairway will take to revise its mortgage lending policies and practices to address redlining risks, including, at a minimum, risk that may arise from office locations or assignment of loan officers to office locations, loan officer outreach and referral relationships, types of loan products, and marketing in the Birmingham MSA;

b. the adoption of, or changes to, written policies and procedures regarding Fairway’s marketing, as well as the training and monitoring of its loan officers in marketing mortgage loan products, soliciting mortgage loans, and originating mortgage loans in the Birmingham MSA; c. the adoption of, or changes to, processes for ongoing statistical monitoring of mortgage redlining risk in the Birmingham MSA, including statistical peer analysis of the percentage of applications and originations from Majority- Black Neighborhoods in the Birmingham MSA; and d. the adoption of, or changes to, the processes for reporting redlining risk or associated remedial efforts in the Birmingham MSA to the Board. 13.

The Remedial Plan must include specific timeframes for implementation of the actions identified in Paragraphs 11-12 and a mechanism for keeping the Board apprised of their status. The proposals within the Remedial Plan will be subject to non-objection by Plaintiffs. Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 7 of 27

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14.

If Plaintiffs object to any portion of the Remedial Plan, Fairway must make revisions and resubmit the Remedial Plan within 15 days of receiving the objection. Fairway must begin implementing the Remedial Plan within 30 days of Plaintiffs’ written notice of nonobjection to it. Any material changes to the Remedial Plan are subject to Plaintiffs’ prior nonobjection.

III Fair Lending Training IT IS FURTHER ORDERED that:

15.

Fairway must ensure that all Covered Staff and Officials receive annual live or interactive fair lending training. The training must include topics on implicit racial bias, conduct that constitutes redlining, and how to detect, prevent, and remedy redlining, as well as training on Fairway’s obligations under ECOA, Regulation B, the FHA, and this Order. Fairway will implement a system for each Covered Staff and Official to acknowledge that they completed the fair lending training. All training attendees will be required to demonstrate proficiency. Fairway must bear all costs associated with the training.

16.

Within 45 days of the Effective Date, Fairway must submit the proposed training curriculum to Plaintiffs for non-objection. If Plaintiffs object to any portion of the training curriculum, Fairway must make revisions and resubmit the training curriculum within 15 days of receiving the objection.

17.

Within 30 days of Plaintiffs’ written notice of non-objection regarding the proposed training curriculum, Fairway must commence delivery of the training described in this Section with training to conclude within 45 days. Fairway must provide a report to Plaintiffs that Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 8 of 27

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includes the acknowledgements and demonstrations of proficiency described in Paragraph 15 as part of its annual Compliance Report under Paragraph 51. 18.

Any person who becomes a Covered Staff or Official must, within 30 days of beginning such position, receive the training described in Paragraph 15. IV Manager of Community Lending IT IS FURTHER ORDERED that:

19.

Within 90 days of the Effective Date, Fairway must designate a full-time employee as a Manager of Community Lending with responsibility for overseeing the development of Fairway’s lending in Majority-Black Neighborhoods and Fairway’s compliance with Sections III through IX of this Order. Fairway must maintain this position throughout the term of this Order. If the Manager of Community Lending leaves the position or a new Manager of Community Lending is appointed at any time during the term of this Order, Fairway must notify Plaintiffs in writing within 10 days of such change. 20.

The Manager of Community Lending must report directly to Fairway’s Executive Vice President of Fair Lending.

21.

The Manager of Community Lending and Fairway will oversee the continued development of lending in Majority-Black Neighborhoods within the Birmingham MSA consistent with the action steps contained in the Credit Needs Assessment, coordinate the community lending initiatives and outreach programs required under this Order, promote financial education, serve as a resource to Fairway’s staff to encourage and develop more lending to Qualified Applicants within Majority-Black Neighborhoods, monitor loan officers’ solicitation and origination of loans in Majority-Black Neighborhoods, and build relationships Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 9 of 27

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with community groups. The Manager of Community Lending must provide reports on at least an annual basis to the Board and Chief Executive Officer of Fairway on Fairway’s activities under Sections III through IX of this Order.

V Location and Personnel to Serve Majority-Black Neighborhoods IT IS FURTHER ORDERED that:

22.

Subject to any applicable approval of the appropriate regulator or licensing agency, within 7 months of the Effective Date Fairway must open or acquire one new loan production office or full-service retail office located in a Majority-Black Neighborhood. The office must be in a retail-oriented space in a visible location and have signage that is visible to the general public. The office must accept first-lien mortgage loan applications and must provide, at a minimum, the full range of services and hours of operation offered at Fairway’s other retail location(s) in the Birmingham MSA. The location of the office must consider the recommendations of the Credit Needs Assessment required by Section II and will be subject to Plaintiffs’ non-objection. If Plaintiffs object to the location of the office, Fairway must submit a new proposed location with 30 days of receiving the objection. 23.

Once the office required by Paragraph 22 has been established, Fairway must assign at least one full-time mortgage loan officer or community lending officer to the new office whose responsibilities will include soliciting mortgage loan applications from Majority-Black Neighborhoods in the Birmingham MSA. This individual must receive compensation that is no less favorable than the compensation provided to other Fairway loan officers in the Birmingham MSA. Fairway must maintain the mortgage loan officer or community lending officer assignment described in this Paragraph for the term of this Order. Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 10 of 27

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VI Loan Subsidy Fund IT IS FURTHER ORDERED that:

24.

Fairway must invest at least $7,000,000 in a loan subsidy fund to increase the mortgage credit extended in Majority-Black Neighborhoods (Loan Subsidy Program). Through the Loan Subsidy Program, Fairway must offer home purchase, refinance, and home improvement loans to Qualified Applicants on a more affordable basis than otherwise available from Fairway.

25.

Loan subsidies under the Loan Subsidy Program will be provided through any of the following means, or a combination thereof:

a. originating a mortgage loan at an interest rate below the otherwise prevailing market interest rate offered by Defendant;

b. down payment assistance in the form of a direct grant; c. closing cost assistance in the form of a direct grant; d. payment of the initial mortgage insurance premium on loans subject to such mortgage insurance; or e. other assistance measures, if approved by Plaintiffs in writing. The combined forms of loan subsidies set forth in this Paragraph cannot exceed $14,000 per Qualified Applicant unless Fairway receives written non-objection from Plaintiffs to increase that amount.

26.

Fairway must offer each Qualified Applicant one or more of the forms of the loan subsidy set forth in Paragraph 25, subject to the terms of this Order and regulatory requirements. Fairway will retain discretion to offer more than one, or all, of the forms of assistance in Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 11 of 27

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Paragraph 25 to Qualified Applicants on an individual basis as it deems appropriate subject to regulatory requirements. Fairway must exercise this discretion in a manner that is consistent with originating mortgage loans to Qualified Applicants, with due reliance upon the applicable mortgage loan underwriting standards and will have discretion to provide the loan subsidy among its mortgage loan products.

27.

The investment in the Loan Subsidy Program that is set forth in Paragraph 24 must consist only of the cost of providing the loan subsidies to consumers described in Paragraph 25 and not the cost of implementing the Loan Subsidy Program, which will be separately borne by Fairway. Loan subsidies under the Loan Subsidy Program must be provided throughout the term of the Order set forth in Section XIX, so long as funds remain for the Loan Subsidy Program.

28.

No provision of this Order, including this Section, requires Fairway to make any unsafe or unsound loan or to make a loan to a person who is not qualified for the loan based upon lawful, nondiscriminatory terms. Fairway’s underwriting standards applied to consumers seeking loans for properties located in Majority-Black Neighborhoods must be no less favorable than the underwriting standards applied to loans sought by consumers seeking loans for properties in other census tracts in the Birmingham MSA. Loans that Fairway originates under the Loan Subsidy Program will not exceed the conforming loan limit established by the Federal Housing Finance Agency. Nothing in this order relieves Defendant of its responsibilities to comply with Federal consumer financial law, 12 U.S.C. § 5481(14).

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VII Advertising and Outreach IT IS FURTHER ORDERED that:

29.

Fairway must spend at least $500,000 over the term of this Order on advertising and outreach to increase lending in Majority-Black Neighborhoods, as set forth in this Section. 30.

Fairway’s advertising and outreach under this Section must be informed by the findings and recommendations of the Credit Needs Assessment required in Section II, must advertise Fairway’s residential loan products for purchase, refinance, and home improvement loans and the Loan Subsidy Program to Majority-Black Neighborhoods, and must seek to generate applications for mortgage loans from Qualified Applicants. 31.

Fairway must include on all of its written advertising or promotional materials referencing residential mortgage loans, including digital and online advertising, an Equal Housing Opportunity logo, slogan or statement. All audio advertising will include an audible statement that Fairway is an “Equal Opportunity Lender” or an “Equal Housing Lender.” 32.

Fairway must conduct or sponsor at least two outreach programs in the Birmingham MSA each year during the term of this Order. These programs will be designed for real estate professionals and entities that can be identified as engaging in the residential real estate-related business in Majority-Black Neighborhoods. Through these programs, Fairway must inform attendees of its products and services for purchase, refinance, and home improvement loans, including the Loan Subsidy Program described in this Order, and otherwise develop business relationships with them, as appropriate considering the remedial goals of this Order. Fairway may offer these outreach programs at its new office location required to be Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 13 of 27

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opened under Paragraph 22 or at another location reasonably convenient to the business operations of the attendees and to Majority-Black Neighborhoods. VIII Consumer Financial Education IT IS FURTHER ORDERED that:

33.

Fairway must spend at least $250,000 for the purpose of funding a consumer financial education program that considers the results of the Credit Needs Assessment required by Section II and is designed to provide information, training, and counseling services about consumer finance to individuals in Majority-Black Neighborhoods to help identify and support Qualified Applicants.

34.

Through the consumer financial education program described in Paragraph 33, Fairway must sponsor at least two financial education events each year during the term of this Order, to be offered by community or governmental organizations with which Fairway partners pursuant to Section IX. Salaries or other compensation for participating personnel of Fairway or any of its affiliates will not be credited towards the amount spent on these programs. 35.

Fairway may offer these consumer financial education events at its new office location required to be opened under Paragraph 22 or at another location reasonably convenient to Majority-Black Neighborhoods.

IX Community Development Partnership Program IT IS FURTHER ORDERED that:

36.

Fairway must spend at least $250,000 on partnerships with one or more community-based or governmental organizations that provide: Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 14 of 27

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a. home repair or other grants designed to assist homeowners who experience financial distress or deferred maintenance on their properties; or b. consumer financial education, homeownership, or foreclosure prevention services.

These grants or services must be provided to residents of Majority-Black Neighborhoods. 37.

Fairway must develop the partnerships described in Paragraph 36 in a manner consistent with the recommendations of the Credit Needs Assessment required by Section II; specifically, Fairway must form partnerships with organizations that will aid it in marketing its residential loan products for purchase, refinance, and home improvement loans in Majority- Black Neighborhoods and extending credit to Qualified Applicants seeking loans for properties in Majority-Black Neighborhoods.

38.

During the term of this Order, Fairway must evaluate its partnerships annually to identify any required changes to the program to better meet the residential credit needs of Majority-Black Neighborhoods, and the evaluation must be presented to Plaintiffs for nonobjection. Fairway must present a summary of its evaluation and any proposed changes to Plaintiffs as a part of its annual Compliance Report under Paragraph 51. Any proposed changes will be subject to Plaintiffs’ non-objection.

X Order to Pay Civil Money Penalty IT IS FURTHER ORDERED that:

39.

Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law alleged in the Complaint, Fairway must pay a civil money penalty of $1,900,000 to the Bureau.

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40.

Within 10 days of the Effective Date, Fairway must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.

41.

The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 42.

Fairway, for all purposes, must treat the civil money penalty paid under this Order as a penalty paid to the government. Regardless of how the Bureau ultimately uses those funds, Fairway may not:

a. claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b. seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. 43.

To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Fairway may not argue that Fairway is entitled to, nor may Fairway benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund. If the court in any Related Consumer Action offsets or otherwise reduces the amount of compensatory monetary remedies imposed against Fairway based on the civil money penalty paid in this action or based on any payment that the Bureau makes from the Civil Penalty Fund, Fairway must, within 30 days after entry of a final order granting such offset or reduction, notify the Bureau, and pay the amount of the offset or reduction to the U.S. Treasury. Such a payment will not be considered an additional Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 16 of 27

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civil money penalty and will not change the amount of the civil money penalty imposed in this action.

XI Additional Monetary Provisions IT IS FURTHER ORDERED that:

44.

In the event of any default on Fairway’s obligations to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the Effective Date to the date of payment, and will immediately become due and payable.

45.

Fairway relinquishes all dominion, control, and title to the funds paid under this Order to the fullest extent permitted by law and no part of the funds may be returned to Fairway. 46.

The facts alleged in the Complaint will be taken as true and be given collateral estoppel effect, without further proof, in any subsequent action by the Plaintiffs to enforce the Order or its rights to any payment or monetary judgment under the Order. 47.

Fairway acknowledges that its Taxpayer Identification Number (Employment Identification Number), which Fairway previously submitted to the Bureau, may be used for collecting and reporting on any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.

48.

Within 30 days of the entry of a final judgment, order, or settlement in a Related Consumer Action, Fairway must notify Plaintiffs of the final judgment, order, or settlement in writing. That notification must indicate the amount of redress, if any, that Fairway paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid.

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COMPLIANCE PROVISIONS XII Role of the Board and Executives IT IS FURTHER ORDERED that:

49.

Fairway’s Board has the ultimate responsibility for ensuring that Defendant complies with this Order.

50.

Fairway’s Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, Chief Operations Officer, Chief Compliance Officer, Chief Marketing Officer, and any other chief officer of the Company (collectively, Fairway’s Executives), and Fairway’s Board must review all plans and reports required by this Order, and any submissions to Plaintiffs prior to such submission.

51.

One year after the Effective Date, and each year thereafter, Fairway must submit to Plaintiffs an accurate written compliance progress report (Compliance Report) that has been approved by the Board, the accuracy of which is sworn to under penalty of perjury, and which, at a minimum:

a. describes the steps that Fairway’s Board and Executives have taken to reasonably assess whether Defendant is complying with the Remedial Plan and each applicable paragraph and subparagraph of the Order; b. describes in detail whether and how Fairway has complied with the Remedial Plan and each applicable paragraph and subparagraph of the Order, including the manner of verification of such compliance and any corrective actions taken to remedy potential non-compliance with the applicable requirement, paragraph, or subparagraph;

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c. includes the information required under Paragraphs 17 and 38 of this Order; d. provides a detailed accounting of all funds required to be spent under Sections VI, VII, VIII, and IX in accordance with the data specifications of the Plaintiffs;

e. evaluates the effectiveness of the Loan Subsidy Program under Section VI and Fairway’s progress in deploying funds to Qualified Applicants, as well as identifying and summarizing for Plaintiffs’ non-objection any proposed changes to the Loan Subsidy Program to better reach Qualified Applicants; and f. attaches a copy of each Order Acknowledgment obtained under Section XIV, unless previously submitted to the Bureau.

52.

Fairway’s Board and Executives must:

a. authorize whatever actions are necessary for Fairway to assess whether Fairway is complying with the Remedial Plan and each applicable paragraph and subparagraph of the Order;

b. authorize whatever actions, including corrective actions, are necessary for Fairway to fully comply with the Remedial Plan and each applicable paragraph and subparagraph of the Order; and c. require timely reporting by management to Fairway’s Board and Executives on the status of compliance obligations.

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XIII Reporting Requirements IT IS FURTHER ORDERED that:

53.

Fairway must notify Plaintiffs of any development that may affect compliance obligations arising under this Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Fairway; or a change in Fairway’s name or address. Fairway must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. 54.

Within 7 days of the Effective Date, Fairway must: a. designate at least one telephone number and email, physical, and postal addresses as points of contact that Plaintiffs may use to communicate with Fairway; and b. designate at least one telephone number and email, physical, and postal addresses as points of contact for consumers with inquiries related to consumer relief under the Order.

55.

Fairway must report any change in the information required to be submitted under Paragraph 54 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner.

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XIV Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:

56.

Within 7 days of the Effective Date, Fairway must submit to Plaintiffs an acknowledgment of receipt of this Order, sworn under penalty of perjury. 57.

Within 30 days of the Effective Date, Fairway must deliver a copy of the Complaint and this Order to each of its board members and executive officers, as well as to any managers and employees who have responsibilities related to the subject matter of this Order, including Covered Staff and Officials. Fairway must provide an opportunity for all persons to whom the Complaint and this Order is distributed to ask any questions concerning the Complaint and this Order, and Fairway must provide answers.

58.

Fairway must deliver a copy of the Complaint and this Order, with the opportunity to ask questions as discussed in Paragraph 57, to any business entity resulting from any change in structure referred to in Section XIII, any future board members and executive officers, as well as to any managers and employees, who will have responsibilities related to the subject matter of this Order, including Covered Staff and Officials, before they assume their responsibilities.

59.

Fairway must secure a signed and dated statement acknowledging receipt of a copy of this Order within 30 days of delivery from all persons receiving a copy of this Order under this Section.

60.

Ninety days from the Effective Date, Fairway must submit to Plaintiffs a list of all persons and their titles to whom this Order was delivered under the Section of this Order titled Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 21 of 27

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“Order Distribution and Acknowledgement” and a copy of all signed and dated statements acknowledging receipt of this Order under Paragraph 59. XV Recordkeeping IT IS FURTHER ORDERED that:

61.

Fairway must create and retain the following business records: a. all documents and records necessary to demonstrate full compliance with the Remedial Plan and each provision of this Order, including all submissions to Plaintiffs;

b. all documents and records pertaining to the Credit Needs Assessment and Remedial Plan described in Section II above;

c. the following documents and records pertaining to the Loan Subsidy Program for each loan receiving a subsidy: the amount loaned, amount of subsidy, type of subsidy, Universal Loan Identifier, type of loan, loan purpose, the property address of the collateral, and the applicant race and ethnicity as reported under the Home Mortgage Disclosure Act, 12 U.S.C. §§ 2801-2811, and Regulation C, 12 C.F.R. Part 1003;

d. for each individual borrower who received a loan under the Loan Subsidy Program: the consumer’s name, address, phone number, email address, a description of the loan received including describing the loan terms and the subsidies provided under the Loan Subsidy Program, and the date on which the loan closed;

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materials required under Section VII or used in the Birmingham MSA, including any such materials used by a third-party on Fairway’s behalf, and information about how the materials were distributed or otherwise provided; f. all consumer complaints and refund requests (whether received directly or indirectly, such as through a third-party), and any responses to those complaints or requests, relating to the offering or provision of loans in the Birmingham MSA;

g. records showing, for each Covered Staff and Official providing services related to the Loan Subsidy Program, that person’s name; telephone number; email, physical, and postal addresses; job title or position; dates of service; and, if applicable, the reason for departure or termination; and h. records showing, for each service provider providing material services relating to the administration of the Loan Subsidy Program, the name of a point of contact, and that person’s telephone number; email, physical, and postal address; job title or position; dates of service; and, if applicable, the reason for termination.

62.

All documents and records must be maintained in their original electronic format for at least 7 years from the Effective Date. Data should be centralized, and maintained in such a way that access, retrieval, auditing and production are not hindered. 63.

Fairway must make the documents identified in Paragraph 61 available to Plaintiffs upon either Plaintiff’s request.

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XVI Notices IT IS FURTHER ORDERED that:

64.

Unless otherwise directed in writing by the Bureau, Fairway must provide all submissions, requests, communications, or other documents relating to this Order by email with the subject line, “CFPB and United States v. Fairway Independent Mortgage Corp., Case No. 2:24-cv-01405” to [email protected] addressed as follows: ATTN: Supervision Director Consumer Financial Protection Bureau Office of Supervision ATTN: Enforcement Director Consumer Financial Protection Bureau Office of Enforcement 65.

All material required by this Order will be sent to the United States by email to the Department of Justice attorneys assigned to this matter as follows: Sara L. Niles Terrence K. Mangan, Jr.

Housing and Civil Enforcement Section Civil Rights Division, U.S. Department of Justice 150 M Street NE, 8th Floor Washington, DC 20002 Attn: DJ# 188-1-9 Phone: (202) 514-4713 Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 24 of 27

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Fax: (202) 514-1116 [email protected] [email protected] XVII Cooperation with the Bureau IT IS FURTHER ORDERED that:

66.

Fairway must remain registered for the Bureau’s Company Portal and in connection with responding to consumer complaints and inquiries on the Company Portal, must comply with the timely response requirements set forth in § 1034(b)(1)-(3) of the CFPA, 12 U.S.C. § 5534(b).

XVIII Compliance Monitoring IT IS FURTHER ORDERED that:

67.

Within 14 days of receipt of a written request from either Plaintiff, Fairway must submit additional compliance reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. 68.

Fairway must permit Plaintiffs’ representatives to interview any employee or other person affiliated with Fairway who has agreed to such an interview regarding: (a) the Lawsuit Subject Matter, or (b) compliance with this Order. The person interviewed may have counsel present.

69.

Nothing in this Order will limit the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process. Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 25 of 27

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XIX Administrative Provisions IT IS FURTHER ORDERED that:

70.

Except for Paragraph 6 where this Order expressly provides that its requirements are permanent, all other provisions of this Order will terminate on the later of 5 years from the Effective Date or 5 years from the most recent date that any Plaintiff files a motion seeking to hold Defendant in contempt for any violation of the Order, if such motion is filed within 5 years of the Effective Date. If the court rules that Fairway did not violate any provision of the Order, and the ruling is either not appealed or upheld on appeal, then the Order will terminate as though the contempt motion had never been filed. The Order will remain effective and enforceable until such time, except to the extent that any provisions of this Order have been amended, suspended, waived, or terminated by the Court, or if the Order remains in effect pursuant to Paragraph 71. 71.

Notwithstanding Paragraph 70, if, within 5 years of the Effective Date, Fairway has not invested or spent all money required by Sections VI through IX of this Order, the Order will remain in full effect until 3 months after Fairway has invested or spent all money as required and submitted a final report to the Plaintiffs that demonstrates fulfillment of this obligation. 72.

Calculation of time limitations will run from the Effective Date and be based on calendar days, unless otherwise noted. If a deadline under this Order falls on a Saturday, Sunday, or legal holiday, the deadline is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday.

73.

Should Fairway seek to transfer or assign all or part of its operations that are subject to this Order, Fairway must, as a condition of the transfer or assignment, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Case 2:24-cv-01405-AMM Document 12 Filed 12/03/24 Page 26 of 27

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Order.

XX Retention of Jurisdiction IT IS FURTHER ORDERED that:

74.

The Court will retain jurisdiction of this matter for the purpose of enforcing this Order.

IT IS SO ORDERED.

DONE and ORDERED this 3rd day of December, 2024.

_________________________________ ANNA M. MANASCO UNITED STATES DISTRICT JUDGE

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