United States v. First National bank of Vicksburg

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION

UNITED STATES OF AMERICA,
Plaintiff,

FIRST NATIONAL BANK
OF VICKSBURG,
Defendant.

______________________________

CONSENT DECREE

The United States files this Consent Decree simultaneously with its Complaint against the First National Bank of Vicksburg (hereinafter "Bank") alleging violations of the Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988), 42 U.S.C. {{ 3601-3619; and the Equal Credit Opportunity Act, 15 U.S.C. {{ 1691-1691f. The Complaint alleges that the Bank has engaged in policies and practices that discriminated on the basis of race in the extension of unsecured home improvement loans by subjecting its black customers to terms and conditions for unsecured home improvement loans that resulted in their paying more for their loans than similarly situated white customers.

The Bank neither admits nor denies all of the allegations in the Complaint and states that it has never discriminated on the basis of race in its unsecured home improvement loan business.

More specifically, the United States alleges that the Bank has for a number of years offered unsecured home improvement loans which were either single payment loans, to be paid in full at maturity, or amortized, with monthly payments due during the loan term. Interest on single payment loans was calculated by the simple interest method while the interest on amortized loans was calculated, until July 1993, either as simple interest or add-on interest. The add-on interest method resulted in a significantly higher annual percentage rate than simple interest. The United States alleges that nearly all of the Bank's black customers for unsecured home improvement loans were treated in a disparate fashion with respect to repayment terms and interest rates. An investigation by the Comptroller of the Currency showed that during calendar year 1992, 97% (59 of 61) of the Bank's black customers for unsecured home improvement loans received amortized loans, while 49% (62 of 126) of the Bank's white customers who received unsecured home improvement loans were given the more favorable and less expensive single payment loans. Also in that same time period, 20% (13 of 64) of the Bank's white customers but only 3% (2 of 59) of its black customers who received unsecured amortized home improvement loans were granted simple interest.

The parties have agreed that, in order to avoid protracted and costly litigation, this controversy should be resolved voluntarily. The parties have also agreed that there should be no evidentiary hearing, trial or other adjudication on the merits, and that the entry of this Consent Decree is not to be construed as an admission by the Bank of the validity of any of the claims asserted in this action. The parties further agree that this consent decree is final and binding against the United States solely as to the claims raised in its complaint. It is not intended to address any claims that may arise with respect to the Bank's decision whether to accept or reject any future application for a home improvement loan.

The Bank has also entered into a Stipulation and Consent Order with the Office of the Comptroller of the Currency (the "Comptroller's Order") regarding the subject matter of this Consent Decree.

Now therefore, on the basis of the foregoing representations of the United States and the Bank, it is hereby ORDERED, ADJUDGED, and DECREED as follows:

GENERAL INJUNCTIVE PROVISION
1. The Bank, its officials, employees, and agents, as well as successors as specified in paragraph XI, are permanently enjoined from imposing, on the basis of race, different terms or conditions on loans for improving, repairing or maintaining a dwelling (hereinafter "home improvement loans"). The terms and conditions include, but are not limited to, amortized or single repayment, the method of calculating interest, and the interest rate. Fair Housing Act, 42 U.S.C. {3605(a); and Equal Credit Opportunity Act, 15 U.S.C. { 1691(a)(1).
NON-DISCRIMINATORY TREATMENT OF HOME
IMPROVEMENT LOAN APPLICANTS
1. Within sixty days (60) from the entry of this Consent Decree, the Bank shall send, by first class mail, to counsel for the United States and the Deputy Comptroller for Compliance Management ("Deputy Comptroller"), with a copy to the District Administrator for the Southeastern District ("District Administrator"), a loan policy which incorporates written, non-discriminatory standards for the extension of home improvement loans, and for the terms and conditions of such loans; and an application checklist which is consistent with those standards.
2. If, within thirty (30) days after receipt of the proposed loan policy described above, counsel for the United States indicates in writing to the Bank that it does not agree with the proposed loan policy, then counsel for the United States and the Bank shall seek to resolve their differences within twenty one (21) days thereafter. In the event that the parties can not agree, then the Bank may, within fourteen (14) days thereafter, request the Court to rule on same. If, within thirty (30) days after receipt of the proposed loan policy, counsel for the United States has no objection to the proposed loan policy, counsel shall so inform the Bank in writing.
  Within thirty (30) days of the approval of the proposed loan policy by the District Administrator and counsel for the United States or by the Court, whichever is later, the Bank shall adopt the proposed loan policy and thereafter distribute same to all officers or employees involved in the underwriting or processing of home improvement loans and incorporate same in the Bank's Loan Policy Manual. This procedure for resolving differences shall not be binding upon the Comptroller of the Currency, however. See Comptroller's Order at Article III (2).
3. The Bank will require that loan processors, underwriters or other relevant Bank employees complete the application checklist described above in order to insure that they solicit and record information necessary to allow for a fair evaluation of home improvement loan applications consistent with the Bank's underwriting standards. The Bank will assess the completed applications of black customers and determine the terms and conditions of home improvement loans to be offered such customers in the same manner and under the same standards or criteria that it applies to white customers.
4. Prior to the final decision whether to extend or reject an application for any home improvement loan, all loan processing and underwriting documentation for the applicant shall be reviewed by a senior loan officer, who has a detailed knowledge of the standards for the extension of home improvement loans and the standards for the terms and conditions of such loans. The senior loan officer shall determine if all relevant information has been obtained and may return the file with a request for more information. The senior loan officer shall have the authority to concur with or to change the initial decision whether or not to extend a home improvement loan or the terms and conditions of that loan. The senior loan officer shall also certify, by signature, that any proposed home improvement loan containing a term or terms not in conformity with the loan policy is in compliance with paragraph II (3) of this Consent Decree, the Fair Housing Act and the Equal Credit Opportunity Act. All such determinations shall be made in writing and shall be signed and dated by the designated senior loan officer. The original written determination shall be maintained in a credit file assigned to the applicant or borrower, as the case may be. A copy of all such written determinations shall be maintained in a separate file at the Bank.
5. The designated senior loan officer shall report to the Board of Directors of the Bank, or a designated committee thereof, on at least a monthly basis, all borrowers who receive a home improvement loan with a term or terms not in conformity with the loan policy, as well as their race and the nonconforming term(s).
6. The Bank may change or modify the loan policy described in this paragraph in the same manner as provided for in paragraph II - 2.
COMPLIANCE
1. Within seventy-five (75) days after execution of this Consent Decree, the Bank shall establish, implement, and adhere to a loan review system designed to ensure compliance with the Fair Housing Act, the Equal Credit Opportunity Act, Regulation B and this Consent Decree. Such loan review system shall require quarterly reviews by a designated loan review officer of all home improvement loans originated during the preceding quarter. Such reviews shall be in writing, and shall be signed and dated by the designated review officer. Each review shall include, at a minimum, the following:
  1. an analysis and comparison of the terms of all such credit transactions by the race of the borrowers; and
  2. an analysis and comparison of the terms of all such credit transactions by the racial composition of the census tracts (or, absent census tracts, of the county) where the subject real estate is located.
2. Not later than sixty (60) days after the end of each calendar quarter, the designated review officer shall report to the Board, or a designated committee thereof, the results of such review.
EDUCATIONAL PROGRAM
1. Within ninety (90) days after execution of this Consent Decree, every Bank employee who regularly participates in decisions of whether or not to extend credit for home improvement loans and/or participates in decisions regarding the terms of such credit, and every officer and director of the Bank shall be provided with a copy of this Consent Decree, and shall complete a training course appropriate for the duties and responsibilities of each such individual. Training courses for all such employees, officers and directors shall include, at a minimum the following elements:
  1. a detailed discussion of the purpose of, and prohibitions contained in, the Fair Housing Act, the Equal Credit Opportunity Act and Regulation B;
  2. a detailed discussion of individual and principal liability for violations of the Fair Housing Act, the Equal Credit Opportunity Act and Regulation B;
  3. a detailed discussion of the Bank's responsibilities under this Consent Decree and provide a copy of that Consent Decree;
  4. a detailed discussion of the racial and cultural diversity of the population within the Bank's Community Reinvestment Act ("CRA") Delineated Community;
  5. a detailed discussion of the Bank's policies regarding illegal discrimination, including the Bank's disciplinary policy regarding violations of the Fair Housing Act, Equal Credit Opportunity Act and Regulation B by employees, officers or directors of the Bank; and
  6. for all officers and employees who regularly participate in decisions regarding home improvement loans, instruction in the proper completion of the application and application checklist, including the requirements that they use their best efforts to obtain and document all relevant information necessary to reach a decision on the application and that they document those efforts in writing on the application checklist.
2. Commencing ninety (90) days after execution of this Consent Decree and thereafter for the duration of this Decree, every new Bank employee who is contemplated by the Bank to regularly participate in decisions of whether or not to extend credit for home improvement loans and/or to regularly participate in decisions regarding the terms of such credit, and every new officer and director of the Bank shall complete such a training course prior to providing any services to or on behalf of the Bank.
3. Each person required to complete such training course shall execute a form, which shall be maintained by the Bank, acknowledging:
  1. attendance and completion of the training course;
  2. that they have received, read and understand the Bank's policies regarding illegal discrimination, including the Bank's disciplinary policy regarding violations of the Fair Housing Act, the Equal Credit Opportunity Act and Regulation B;
  3. that they understand that violations of the Fair Housing Act, the Equal Credit Opportunity Act or Regulation B may subject them to individual liability, judicial sanctions, and/or administrative sanctions; and
  4. that they understand that violations of the Fair Housing Act, the Equal Credit Opportunity Act or Regulation B may subject the Bank to liability, judicial sanctions, and/or administrative sanctions.
TESTING
1. Within ninety (90) days after execution of this Consent Decree, the Bank shall submit to counsel for the United States and the Deputy Comptroller, with a copy to the District Administrator, a proposal to enter into at least one contract with a qualified organization or person to develop and implement a program to matched pair test for racial discrimination in the Bank's credit transactions involving home improvement loans. Such proposal shall include, at a minimum, the following:
  1. the identity of the organization or person proposed to perform the testing;
  2. a detailed description of the experience of such organization or person in testing for race discrimination in credit transactions;
  3. a detailed description of the methodology to be utilized by such organization or person;
  4. a detailed description of the analysis of the test results to be performed;
  5. a detailed description of the scope of the proposed testing, including the number of tests to be performed and the loan products to be tested; and
  6. a requirement that testing will begin no later than sixty (60) days after completion of the training course described in paragraph IV or after approval by the Department of Justice and the District Administrator, whichever is later.
    The Bank shall also arrange for matched pair testing to be conducted at least annually, thereafter. The information in the proposal shall not be shared with the Bank's officers or employees other than the Bank's executive officers and the members of the Board.
2. The Department of Justice and District Administrator shall have authority to approve or disapprove the proposed contract within thirty (30) days after receipt.
  1. In the event either determines the proposed contract is unacceptable, the Bank shall submit a new proposal within thirty (30) days after notification of such determination.
  2. In the event neither has objection to the proposed contract, the Bank shall enter into the proposed contract within fourteen (14) days after notification of such determination by the Department of Justice or the District Administrator, whichever is later.
3. A summary of the results of the testing, including any analysis performed by the organization or person, shall be reported to the Board within thirty (30) days after receipt by the Bank. Within thirty (30) days thereafter, the Board shall determine whether additional corrective measures are necessary to ensure compliance with the Fair Housing Act, the Equal Credit Opportunity Act, Regulation B, this Order and the Bank's policies.
4. Nothing contained herein shall prevent the United States or the Comptroller from testing the Bank.
CUSTOMER ASSISTANCE PROGRAM
1. Within ninety (90) days after execution of this Consent Decree, the Bank shall establish and implement a customer assistance program designed to provide information to customers and prospective customers relating to the Bank's home improvement loans. Such program shall be designed to provide, at a minimum, the following information:
  1. the current terms of each type of such loan offered by the Bank;
  2. how to qualify for each type of such loan offered by the Bank; and
  3. how to prepare a credit application.
COMPENSATORY RELIEF
1. Within three (3) business days after entry of this Consent Decree, the Bank will deposit Seven Hundred Fifty Thousand Dollars ($750,000.00) into a trust account entitled "First National Bank of Vicksburg Compensation Fund Trust Account" (hereinafter "Compensation Fund") to be administered jointly by the Department of Justice and the District Administrator as joint trustees. Such funds will be distributed by the Bank to persons whom the Department of Justice and the District Administrator will identify as allegedly aggrieved persons under the Fair Housing Act and the Equal Credit Opportunity Act, and who comply with the conditions for receipt of compensation pursuant to this Consent Decree (discussed infra). The Bank will provide written verification of the deposit of this amount of money to Department of Justice and the Deputy Comptroller within seven (7) days of the execution of this Consent Decree. Any interest that may accrue on the funds deposited into the Compensation Fund shall become part of the Compensation Fund; the Bank shall have no claim on such interest except as provided in this Consent Decree.
2. Within forty-five (45) days from the entry of the Consent Decree, the Bank will provide to counsel for the United States and the Deputy Comptroller a list of all black customers who received unsecured home improvement loans during the period January 1, 1990 through July 30, 1993 (hereinafter "Bank's list"). The Bank's list will identify the customers by name, address, telephone number, loan number, initial principal amount, Annual Percentage Rate charged ("APR"), date of origination, maturity date, whether the loan was amortizing or single payment, and whether the interest rate on the loan was calculated under the simple interest or add-on interest calculation method.
3. Concurrent with the submission of the Bank's list, the Bank shall deliver to counsel for the United States and the District Administrator, to the extent available, a complete copy of the loan files for each borrower on the Bank's list. The Bank shall provide other documentation of the information required to be furnished in paragraph (2) of this paragraph if requested by the United States or the Deputy Comptroller. The United States shall also, upon reasonable notice to the bank, be allowed access to the Bank's records and files to verify the accuracy of the list and to assist in identifying the persons entitled to payments from the Compensation Fund. The United States shall keep all information obtained from the Bank's records and files relating to loan applicants confidential to protect the applicants' privacy rights.
4. Within forty-five (45) days of receipt of the Bank's list, counsel for the United States and the District Administrator shall provide the Bank with a list of those black customers whom they have determined are allegedly aggrieved persons and the individual relief to which they are entitled under the terms of this Consent Decree (the "United States' list") subject to the conditions set forth in paragraph VII (6), below. The United States and the District Administrator shall be the only parties responsible for those determinations.
5. Within thirty (30) days after receipt of the United States' list, the Bank shall adjust the interest rate on the outstanding principal amount of each outstanding loan to a person identified on the United States' list. The adjusted interest rate shall be the simple interest rate in effect at the time the loan was originated.
6. Payments from the Compensation Fund to allegedly aggrieved persons shall be subject to the following conditions:
  1. No aggrieved person shall be paid any amount from the Compensation Fund until after execution of a written release of all claims, legal or equitable, which he or she might have against the Bank, its officers, directors, employees, agents or other institution affiliated parties regarding claims asserted by the United States in this lawsuit, with respect to the interest rates charged on unsecured home improvement loans, so long as such claims accrued prior to the entry of this Consent Decree. The form of the release is set forth in Appendix 1 ("Release").
  2. The total amount to be paid by the Bank to the allegedly aggrieved persons shall not exceed seven hundred fifty thousand dollars ( $750,000.00) plus the interest that has accrued in the Compensation Fund.
7. Within twenty (20) days after receipt of the United States' list, the Bank shall notify all persons identified on that list by certified mail, return receipt requested, by letters similar to Appendix 2, attached hereto ("notification letters"). The notification letters shall be accompanied by a blank release and a copy of this Consent Decree. The notification letters shall contain a requirement that each allegedly aggrieved person respond to the Bank at:
  
  Compliance Department
  First National Bank of Vicksburg
  Post Office Box 39
  Vicksburg, Mississippi 39181
  
  no later than sixty (60) days after receipt of the Notification Letter, by delivery of an executed release. The Bank shall forward a copy of each release received pursuant to this paragraph to counsel for the United States and the Deputy Comptroller upon receipt.
8. Thirty (30) days after the mailing of the notification letters, the Bank shall report to counsel for the United States and the Deputy Comptroller those addressees for whom no return receipt card has been obtained. The Bank shall take reasonable steps within the following sixty (60) days to locate such persons, and shall document such efforts. The United States and the Deputy Comptroller may also take steps to locate such persons.
9. The Bank shall issue checks, drawn against the Compensation Fund, to each allegedly aggrieved person identified on the United States' list who delivers to the Bank an executed release within sixty (60) days after receipt of a notification letter, in an amount designated by the United States and the District Administrator pursuant to this Consent Decree. With respect to persons located pursuant to paragraph VII (8), the Bank shall similarly issue checks to each such allegedly aggrieved person who delivers an executed release within sixty (60) days after receipt of a notification letter, a copy of this Consent Decree and a blank release. All checks referred to in paragraph VII (9) shall be issued and mailed, by certified mail, return receipt requested, within five (5) business days after receipt of an executed release.
10. Any funds remaining in the Compensation Fund after payments to aggrieved persons shall be returned to the Bank, and shall be utilized by the Bank to implement other remedial provisions of this Consent Decree, including advertising the loan programs described in paragraph VIII of this Consent Decree. The amount returned to the Bank shall include the compensation assigned to allegedly aggrieved persons on the United States' list who do not execute and return a release to the Bank as required by this paragraph or cannot be located within one hundred forty-five (145) days after receipt by the Bank of the United States' list.
SPECIAL LENDING PROGRAMS
1. Within sixty (60) days after the execution of this Consent Decree, the Bank shall adopt and offer one or more new lending programs for low and moderate income borrowers (such as those described in Appendix 3). The Bank hereby commits to a goal of funding at least one million dollars ($1,000,000) in loans pursuant to such programs within two years after the execution of this Consent Decree, and will make reasonable efforts, including necessary advertising, to achieve this goal.
2. Nothing contained in this paragraph shall require the Bank to compromise its underwriting standards.
CIVIL PENALTY
1. Within thirty (30) days after the date of entry of this Consent Decree, the Bank shall pay the sum of fifty thousand dollars ($50,000) by check payable to the Treasurer of the United States of America. This payment is intended as partial reimbursement to the United States for its investigation in connection with this matter.
RECORD-KEEPING AND REPORTING REQUIREMENTS
1. During the period of this Consent Decree, the Bank will retain all application files submitted for home improvement loans and all documents and notices relevant to any underwriting decisions regarding such loans, including but not limited to, any documents relating to the terms of any such loans. The Bank will retain all records relating to its fair lending compliance program, including documents concerning its employee training on fair lending.
2. To fairly monitor the Bank's processing and evaluation of home improvement loan applicants under this Consent Decree, the United States may, from time to time, seek and be provided access to individual home improvement loan application files and related records, upon reasonable notice and in writing to the Bank. The United States will keep all records and information relating to loan applicants confidential to protect the applicants' privacy rights.
3. The Bank shall serve by first class mail, postage prepaid, upon the Chief of the Housing and Civil Enforcement Section,⁽¹⁾ six month reports beginning forty-five (45) days from the six month period ending June 30, 1994 and continuing for the remainder of the period during which this Consent Decree remains in effect. The reports shall be substantially in the form submitted to the Deputy Comptroller pursuant to Article X of the Comptroller's Consent Order, provided that such reports include, for the period covered by the report, the following:
  1. name, address, telephone number and race of all persons who have received an unsecured home improvement loan; and for each such loan, the loan number, initial principal amount, Annual Percentage Rate charged ("APR"), date of origination, maturity date, whether the loan was amortizing or single payment, and whether the interest rate on the loan was calculated under the simple interest or some other interest calculation method; and
  2. a summary of the test results described in paragraph V, above and any sanctions or disciplinary actions taken in connection with the test findings.
SUCCESSOR IN INTEREST
1. The terms of this Consent Decree will bind any successor in interest to the Bank (including any party acquiring substantially all of the assets and/or liabilities of the Bank) as to employees, branches, and offices now under the control of the Bank, and branches or offices subsequently acquired or consolidated by the Bank, but not otherwise. Nothing herein limits the ability of a successor in interest to the Bank or an independent company or person that acquires control of the Bank to move to modify or otherwise change this Consent Decree, and the United States will consider whether it has any objection to such a motion.
RETENTION OF JURISDICTION
1. The Court shall retain jurisdiction for a period of three (3) years from the date of entry of this Consent Decree. The parties to the Consent Decree will endeavor in good faith to resolve informally any differences regarding interpretation and compliance with this Consent Decree prior to bringing such matters to the Court for resolution. At any time after three years from the date of the Court's entry of this Consent Decree, the Bank may move for dismissal of the case. Dismissal shall be granted unless, no later than 30 days after receipt of the Bank's motion, the United States objects with particularity to the dismissal. If such objection is made, the Court shall hold a hearing on the dismissal motion, and the United States shall have the burden of demonstrating why this Consent Decree should not be terminated. If the United States fails to meet its burden, this Consent Decree shall terminate forthwith and the case shall be dismissed with prejudice.
TIME FOR PERFORMANCE
1. Any time limits for performance imposed by this Consent Order may be extended by mutual agreement of the parties.
COSTS
1. Each party to this litigation will bear its own costs.
It is so ORDERED, ADJUDGED, and DECREED this _____ day of _____________, 1994.

____________________________
UNITED STATES DISTRICT JUDGE

The undersigned apply for consent to the entry of this Order:

For the United States:

JANET RENO
ATTORNEY GENERAL

JAMES P. TURNER
ACTING ASSISTANT ATTORNEY GENERAL
PAUL F. HANCOCK
RICHARD J. RITTER
THOMAS J. KEARY
Attorneys, Housing and Civil Enforcement Section
Civil Rights Division
U.S. Department of Justice
P.O. Box 65998
Washington, D.C. 20035-5998
(202) 514-4752

GEORGE L. PHILLIPS
UNITED STATES ATTORNEY

For the First National Bank of Vicksburg:

JOHN C. WHEELESS, JR.
Wheeless, Beanland, Shappley & Bailess
800 First National Bank Bldg.
l301 Washington Street
P.O. Box 991
Vicksburg, MS 39181
(601) 636-8451

STUART C. STOCK
D. JEAN VETA
Covington & Burling
P.O. Box 7566
Washington, D.C. 20044
(202) 662-6000

Appendix 1

Release

In consideration of (amount) , to be paid to (name) of (address) out of the First National bank of Vicksburg Compensation Fund Trust Account, I, (name) hereby agree, effective upon receipt of the payment, to release and forever discharge the First National Bank of Vicksburg, and all current, former and future officers, directors, employees, agents, institutions affiliated parties, parent companies, affiliates, and successors-in-interest from all legal and equitable claims or causes of action that have been or might be asserted by me, as of the date of the execution of this Release, that arise out of any alleged discrimination with respect to the interest rate(s) charged on an unsecured home improvement loan(s) to me by the First National Bank of Vicksburg.

I acknowledge that I understand and am waiving my right to pursue my own legal action by accepting payment from the First National Bank of Vicksburg.

This Release constitutes the entire agreement between myself and the First National Bank of Vicksburg.

This Release may not be amended or modified by oral agreement.

I have read this Release and understand the contents hereof, and I execute this Release of my own free act and deed.

Signed this _____________ day of ____________________, 1994 at __________________.

__________________________________.

Social Security Number ___________.

STATES OF MISSISSIPPI

COUNTY OF _________________

_____________________ PERSONALLY appeared before me, the undersigned authority in and for the jurisdiction aforesaid, the within named _______________________________________, who being duly sworn acknowledged that he/she signed and delivered the above and foregoing Release on the day and year therein mentioned.

GIVEN under my hand and official seal, this ___ day of ______________, 1994.

_____________________________ Notary Public My Commission Expires:_______

Appendix 2

Notification Letter

First National Bank of Vicksburg

Vicksburg, Mississippi 39181

Dear:

As you may know from publicity accompanying the settlement of a recent lawsuit brought by the United States against the First National Bank of Vicksburg, this bank has been the subject of an investigation by the government for possible race discrimination. The government, through the Department of Justice and the Comptroller of the Currency, has alleged that the policies and practices of this bank resulted in our African American customers paying a higher interest rate on their unsecured home improvement loans than our similarly situated white customers. We have denied those allegations and continue to assert that we have never discriminated on the basis of race in our unsecured home improvement loan business.

Nevertheless, we have agreed with the government to voluntarily resolve this controversy, in part, through the payment of money to those persons allegedly injured by these practices. A copy of the agreements which we have reached with the Justice Department and with the Comptroller are enclosed with this letter.

The government has determined that you may be an alleged victim of that discrimination. Money has been reserved to be paid to you, in the amount of _____ under the terms of the previously mentioned agreements.

If you desire to receive this money, you must sign a General Release, enclosed with this letter, in which you agree to accept this money in exchange for your agreement not to sue the First National Bank of Vicksburg on your own. The release only waives your right to sue the bank for any alleged discrimination regarding the interest rate on an unsecured home improvement loan(s) you received from the bank prior to your signing the release. You must sign this release in the presence of a notary public, and return the signed release to:

Compliance Department
First National Bank of Vicksburg
Post Office Box 39
Vicksburg, Mississippi 39181

The signed and notarized release must be returned to the above address no later than sixty (60) days after your receipt of this letter. The Bank will mail a certified check to you, in the amount specified above, by certified mail, within five (5) business days after the bank receives the executed release.

The government believes the money you will receive is a fair settlement of your claim. If you do not want to participate in this settlement, however, you may decline to do so and thereby give up your right to receive money under these agreements. If you choose not to participate in this settlement, you would retain the right to hire your own attorney and proceed on your own.

Attorneys from the government are willing to discuss your options with you and answer any questions you may have. Those inquiries may be addressed to:

Thomas J. Keary, Esq.
Civil Rights Division
Housing and Civil Enforcement Section
U.S. Department of Justice
P.O. Box 65998
Washington, D.C. 20035-5998
(202) 514-4713
or
Kevin L. Lee, Esq.
Enforcement & Compliance Division
Comptroller of the Currency
250 E Street S.W.
Washington D.C. 20219
(202) 874-4800

They can not act as your private attorney, however. You can consult with your own attorney if you wish, or have your attorney contact the government.

Sincerely,

Appendix 3

The Bank intends to offer one or more new lending programs for low and moderate income borrowers. One such program will be for unsecured home improvement loans and is likely to include an interest rate of one percent (1%) below the Bank's consumer loan rate, with maturities of up to sixty (60) months, and no minimum loan amount. Another such program will be for second mortgage loans and is likely to include an interest rate equal to the Bank's prime rate plus one fourth of one percent (1/4%), provided that if this interest rate exceeds the interest rate equal to the Federal Reserve Discount Rate plus five percent (5%) at the time of origination, the interest rate offered under this loan program will be the Federal Reserve Discount Rate plus 5 percent (5%). Other features of this second mortgage loan product are likely to include maturities of up to fifteen (15) years and individual loan amounts up to fifteen thousand dollars ($15,000).

¹ All materials required by this Consent Decree shall be addressed to: Chief, Housing and Civil Enforcement Section, Civil Rights Division, United States Department of Justice, Post Office Box 65998, Washington, D. C. 20035-5998.