All US Bank loan applications submitted by car dealerships went through an automated approval/denial system, according to Span’s lawsuit.
Underwriters reviewed all loans that the automated system rejected, as well as those it deemed acceptable but that fell outside the bank’s lending policies, he said. The goal was to find and offer modified terms that allowed the US bank to buy the deal while preserving bank risk guidelines; successful attempts were counted towards the subscriber’s origination performance metric.
But Span alleged that underwriters would also select loans approved by the system without the need to review them – loans that would not be counted in the employee’s count – and modify the conditions to increase the chances. that the US Bank gets the business. (For example, lowering the interest rate slightly, Span said.) This change allowed the underwriter to receive credit for originating the loan, Span said.
This manipulation also included an element of discrimination, according to Span. The lawsuit alleged that some white underwriters would refuse to withdraw and change the terms of self-approved agreements involving “candidates who had non-white-sounding names.”
According to Span, US Bank’s indirect auto underwriters needed to fund enough loan applications submitted by dealers to achieve an approval rate of 80% of the team average. But the bank placed the highest weight on the number of an underwriter’s anticipated defaults when evaluating employee performance, according to Span, who alleged it encouraged discrimination.
Span struggled to meet those competing metrics while working in the Chicago South area, which he said he took over after three white underwriters failed. But unlike the white underwriters, who were reassigned or offered different jobs at the bank, Span was kept in the territory and given ‘verbal advice’ for failing to meet targets, according to the trial.
Span said he repeatedly complained to human resources and executives at the U.S. bank, including CEO Andrew Cecere, of alleged “discriminatory and hostile treatment”. The US bank fired Span in July 2020.
“US Bank’s sole justification for doing so was Span’s failure to meet certain metrics in April 2020, the peak of the COVID-19 pandemic, and the corresponding low point in lending volume,” the lawsuit states. Span said he was the only underwriter terminated for these reasons.
Span sued the bank alleging one count of racial discrimination and one count of retaliation for reporting or disputing discrimination, both in violation of federal law. He also alleged single counts of disparate treatment and disparate impact racial discrimination, age discrimination, and retaliation under Illinois human rights law.