UNITED STATES OF AMERICA,

                Plaintiff,                                       CIVIL ACTION NO.

           v.

MID AMERICA BANK, fsb,

                Defendant.

The United States of America alleges:

1. This action is brought by the United States to enforce the provisions of Title VIII of the Civil Rights Act of 1968, the Fair Housing Act, 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.

2. This Court has jurisdiction of this action pursuant to 28 U.S.C. §1345, 42 U.S.C. §3614, and 15 U.S.C. §1691(h). Venue is appropriate pursuant to 28 U.S.C. §1391.

3. Defendant Mid America Bank, fsb (hereinafter "Mid America" or "Bank"), is a wholly-owned subsidiary of MAF Bancorp, Inc., a savings and loan holding company incorporated in 1989 under the laws of the State of Delaware. The Bank is a federally chartered savings and loan association headquartered in Clarendon Hills, Illinois, and does business primarily in the State of Illinois. Mid America offers the traditional services of a financial depository institution, including the receipt of monetary deposits; the financing of residential housing, commercial, and consumer loans; and other types of credit transactions.

4. As of December 31, 2001, the Bank had assets of approximately $5.8 billion and total deposits of approximately $3.5 billion. The Bank is the largest independent thrift institution in the Chicago metropolitan area and the second largest in Illinois. In the year 2001, Mid America ranked 9^th in deposit market share of all financial institutions operating in Cook, DuPage, and Kane counties. Mid America originated approximately $2.8 billion in residential loans in 2001, about $1.5 billion in 2000, and approximately $1.7 billion in 1999.

5. Mid America commenced operations in 1922 under the name of Delnik Building and Loan Association in Cicero, Illinois, and began operating as a federally chartered institution in 1934 under the name of Cicero Federal Building and Loan. In 1961, the Bank changed its name to MidAmerica Federal Savings and Loan Association, and it became Mid America Bank, fsb, in 1998.

6. Mid America is a lending institution which regularly engages in residential real estate-related transactions and regularly extends credit to individuals for such transactions, within the meaning of the Fair Housing Act, 42 U.S.C. §§3601-3619.

7. The Bank is a creditor as defined by the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §1692(a)(e), and its implementing regulation, Regulation B, 12 C.F.R. §202.

8. The Chicago Metropolitan Statistical Area (hereinafter "Chicago MSA"), as defined by the United States Census, includes nine counties - Cook (including the City of Chicago), DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will.

9. Residential housing data for the Chicago metropolitan area show significant patterns of racial and ethnic segregation. According to the 1990 Census, over 76% of the African American population of the Chicago MSA resided in the City of Chicago, and over 92% lived in Cook County. For Hispanic residents, the 1990 Census showed that over 82% lived in Cook County. According to one measure of residential segregation, the Index of Dissimilarity, in which 0 represents complete integration and 1 represents complete segregation, the Chicago metropolitan area was the second most segregated in the nation in 1990, with scores of .855 for African Americans and .632 for Hispanics. These highly segregated residential patterns have remained largely unchanged according to the 2000 Census. Now, over 68% of the African American population of the Chicago MSA resides in the City of Chicago, and over 90% in Cook County; nearly 76% of the Hispanic population lives in Cook County.

10. African American residents of the Chicago MSA are concentrated in majority African American census tracts encompassing well-defined, predominately African American neighborhoods in Chicago and Cook County. These neighborhoods are concentrated in two areas: (a) one which runs south from downtown Chicago through the City and southward through Cook County to the northern edge of Will County; and (b) a second which runs westward from downtown Chicago into Cook County. Hispanic residents, while not as thoroughly segregated, are concentrated in predominantly Hispanic neighborhoods in Chicago and Cook County adjacent to predominantly African American neighborhoods. See Maps attached as:
      Exhibit 1   Exhibit 2   Exhibit 3.

11. Since Mid America first began operation, it has expanded its business, including that of extending credit for residential real estate-related transactions, to substantial portions of the Chicago MSA. In addition to enlarging the geographic scope of the area within which it extends such credit to the entire Chicago MSA, the Bank's expansion has included the construction or acquisition of new branch and lending-only offices, which are designed both to better serve existing customers and to attract new customers to Mid America's services.

12. From 13 branches in 1994, Mid America expanded to 33 branch offices and 2 lending-only offices by early 2002. Prior to 1994, the bank expanded westward from its origins in Cicero and added 4 branches in western Cook County, 6 branches in DuPage County, and 1 each in Kane and northwestern Will counties. After 1994, Mid America focused on adding branch offices in the core of the metropolitan area - inner Cook County and the City of Chicago. Of the Bank's 20 new branch offices built or acquired after 1994 through the spring of 2002, 17 are located in Cook County, including at least 9 in the City of Chicago.

13. In operating and extending the scope of its business, Mid America has acted to meet the residential real estate-related lending and credit needs of predominantly white residential areas (census tracts with a population greater than 50% non-Hispanic white) throughout the Chicago MSA, including Cook County and the City of Chicago, and has avoided serving the lending and credit needs of majority African American and combined African American/ Hispanic neighborhoods, which are located almost exclusively in the City of Chicago and the remainder of Cook County. Geocoded maps showing the racial and national origin divide in the distribution of residential loan applications generated and funded by Mid America in 2000 are attached as Exhibits:   Exhibit 4   Exhibit 5   Exhibit 6   Exhibit 7. Each dot on the maps represents the location of one residential loan application or origination. Mapping of the distribution of residential loan applications generated and funded by Mid America from 1996 through 1999 shows the same race and national origin-based divide throughout that time period.

14. The geographic distribution of the dollar amounts of residential loans funded by Mid America also demonstrates the consistently stark racial and national origin division in its residential lending activities. Between 1996 and 2000, Mid America funded nearly $6 billion in single-family residential real estate-related loans in the Chicago MSA. Only 1%, about $60 million, went to census tracts which were occupied by a majority of African American residents. Only 2.75%, about $164 million, went to census tracts occupied by a majority of African American and African American/Hispanic residents.

15. Mid America has engaged in a race-based pattern of locating or acquiring new offices. It has located or acquired new branch and other offices to serve the residential lending and credit needs of predominantly white areas but not those of predominantly African American or African American/Hispanic neighborhoods. Mid America has never opened any new full-service branch office in a majority African American or African American/ Hispanic neighborhood. As of March 1, 2002, of Mid America's 33 branch offices, only one, Broadview, is located in a census tract in which a majority of the residents are African American. However, the Broadview branch is the only non-traditional office operated by Mid America. In contrast to all its other branch offices, the Bank's Broadview office consists solely of an ATM machine and a lobby area located inside a K Mart. Moreover, the level of services offered at the Broadview branch is substantially less than that offered at Mid America's other branches. Every other branch office offers mortgage lending or investment services, or both; neither is offered at the Broadview branch.

16. In establishing its assessment area, also known as its community service area, boundaries under the Community Reinvestment Act of 1977, 12 U.S.C. §§2901-2906 ("CRA"), Mid America has, since at least 1996, excluded nearly all predominantly African American and African American/Hispanic neighborhoods in the Chicago MSA, even those located in close proximity to its branch offices. See Map attached as  Exhibit 8 . Pursuant to statutoryhousing/documents/midamerica_ex1.htm direction, the Federal Reserve Board promulgated regulations to implement the CRA, 12 C.F.R. §228 ("Reg BB"). Under Reg BB, as amended in 1997, a large bank's assessment area must generally consist of one or more metropolitan areas or contiguous political subdivisions, §228.41(b), unless that area would be extremely large, of unusual configuration, or divided by significant geographic barriers, §228.41(d). Reg BB further provides that, if a large bank's assessment area does not include entire political jurisdictions, its assessment area may not reflect illegal discrimination. §228.41(e). Mid America's assessment area has not included entire political jurisdictions, such as the City of Chicago or all of Cook County. The inclusion of entire jurisdictions would not create an assessment area which would be extremely large, of unusual configuration, or divided by significant geographic barriers - the exceptions specifically recognized by Reg BB.

17. Instead of defining its assessment area in accordance with Reg BB, Mid America circumscribed its lending area in the Chicago MSA to exclude most of the majority African American and majority African American/Hispanic neighborhoods in the City of Chicago and Cook County. Mid America obtained this result by defining its assessment area to include census tracts where its branches and deposit-taking ATMs are located and those from which it has at least 100 savings accounts, together with contiguous census tracts. The Bank's use of savings accounts for the purpose of defining its CRA assessment area is atypically restrictive and disproportionately excludes minority neighborhoods. As a result, according to the 1990 Census, only 3.5% of the census tracts in the Bank's current assessment area are majority African American, compared to over 23% for the entire MSA, over 28% for Cook County, and over 40% for the City of Chicago.

18. The Bank has actively solicited residential real estate-related financial transactions through a variety of means, including working with real estate professionals and builders serving white residential areas, but intentionally has avoided seeking such business from African American and African American/ Hispanic residential areas.

19. From at least 1996 through 2000, Mid America has solicited and funded very few residential real estate-related loan applications from predominantly African American or African American/Hispanic census tracts outside its assessment area. However, Mid America has solicited and funded a very large number and proportion of such loan applications from geographic areas located outside its CRA assessment area in predominantly white census tracts.

20. Analyses of Mid America's conventional home purchase and refinancing applications over the past five years demonstrate that Mid America has served the credit needs of predominantly white neighborhoods of the Chicago MSA to a significantly greater extent than it has served the credit needs of predominantly African American and African American/Hispanic neighborhoods. Similar analyses of residential lending activity in (a) Cook County and (b) the City of Chicago also demonstrate that Mid America has served the credit needs of predominantly white neighborhoods to a significantly greater extent than it has served the credit needs of predominantly African American and African American/Hispanic neighborhoods in each of those geographic areas.

21. In 2000, Mid America generated 5,879 conventional home purchase mortgage applications in the Chicago MSA, but only 116, or 2%, were secured by residential property located in majority African American census tracts; only 224, or 3.8%, were secured by residential property in census tracts with a majority combined African American/Hispanic population.

22. In 1996, Mid America generated 4,017 conventional home purchase mortgage applications in the Chicago MSA, but only 23, or 0.3%, were secured by residential property located in majority African American census tracts; only 95, or 2.4%, were secured by residential property in census tracts with a majority combined African American/Hispanic population.

23. In 2000, Mid America generated 1,090 conventional home refinance loan applications in the Chicago MSA, but only 23, or 2.1%, were secured by residential property located in majority African American census tracts; only 68, or 6.2%, were secured by residential property in census tracts with a majority combined African American/Hispanic population.

24. In 1996, Mid America generated 2,041 conventional home refinance loan applications in the Chicago MSA, but only 20, or 1%, were secured by residential property located in majority African American census tracts; only 68, or 3.3%, were secured by residential property in census tracts with a majority combined African American/Hispanic population.

25. The totality of the defendant's policies and practices described herein constitute the redlining of African American and African American/Hispanic residential neighborhoods of the Chicago MSA as off-limits for the defendant's residential lending business. Its policies and practices deny residents of African American and African American/Hispanic neighborhoods, on account of the racial and/or national origin composition of those neighborhoods, an equal opportunity to obtain mortgage financing and other types of residential real estate-related credit. These policies and practices are not justified by business necessity or other legitimate, non-discriminatory business considerations.

26. The defendant's actions as alleged herein constitute:

    1. Discrimination on the basis of race, color, and national origin in making available residential real estate-related transactions, in violation of the Fair Housing Act, 42 U.S.C. §3605(a);

    2. The making unavailable or denial of dwellings to persons, because of race, color, and national origin, in violation of the Fair Housing Act, 42 U.S.C. §3604(a);

    3. Discrimination on the basis of race, color, and national origin in the terms, conditions, or privileges of 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

    4. Discrimination against applicants with respect to credit transactions, on the basis of race, color, and national origin, in violation of the Equal Credit Opportunity Act, 15 U.S.C. §1691(a)(1).

27. The defendant's policies and practices as alleged herein constitute:

    1. A pattern or practice of resistance to the full enjoyment of rights secured by the Fair Housing Act, 42 U.S.C. §§3601 et seq, and the Equal Credit Opportunity Act, 15 U.S.C. §1691e(h); and

    2. A denial of rights granted by the Fair Housing Act to a group of persons that raises an issue of general public importance.

28. Persons who have been victims of the defendant's discriminatory policies and practices are aggrieved persons as defined in 42 U.S.C. §3602(i) and as described in the Equal Credit Opportunity Act, 15 U.S.C. §1691(e)(i), and have suffered damages as a result of the defendant's conduct in violation of both the Fair Housing and the Equal Credit Opportunity Acts, as described herein.

29. The discriminatory policies and practices of the defendant were, and are, intentional and willful, and have been implemented with reckless disregard for the rights of residents of African American and African American/Hispanic neighborhoods.

WHEREFORE, the United States prays that the Court enter an ORDER that:

(1) Declares that the policies and practices of the defendant constitute a violation of 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;

(2) Enjoins the defendant, its agents, employees, and successors, and all other persons in active concert or participation with it, from:

(A) Discriminating on account of race, color, or national origin in any aspect of its business practices;

(B) Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of the defendant's unlawful practices to the position they were in but for the discriminatory conduct;

(C) 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 the defendant's unlawful practices, including redefining its CRA assessment area in accordance with the CRA and its implementing regulations, without regard to race, color, or national origin, and providing policies and procedures to ensure all segments of the defined area are served without regard to prohibited characteristics;

(3) Awards such damages that would fully compensate all the victims of the defendant's discriminatory policies and practices for the injuries caused by the defendant, pursuant to 42 U.S.C. §3614(d)(1)(B) and 15 U.S.C. §1691e(h);

(4) Awards punitive damages to all the victims of the defendant's discriminatory policies and practices, pursuant to 42 U.S.C. §3614(d)(1)(B) and 15 U.S.C. §1691e(h); and

(5) Assesses a civil penalty against the defendant in an amount authorized by 42 U.S.C. §3614(d)(1)(C), in order to vindicate the public interest.

The United States further prays for such additional relief as the interests of justice may require.