Case: 1:22-cv-02759 Document #: 15 Filed: 08/01/22 Page 1 of 23 PageID #:33

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

KATHLEEN BANKHEAD, individually and )

on behalf of all others similarly situated,
)
) Case No. 1:22-cv-02759
Plaintiff, )
) Hon. John Robert Blakey
v. )
)
WINTRUST FINANCIAL CORPORATION; and )
BARRINGTON BANK & TRUST CO., N.A., )
)
Defendants. )

DEFENDANTS WINTRUST FINANCIAL CORPORATION

AND BARRINGTON BANK & TRUST CO., N.A.’S
MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS

Lucia Nale
Thomas V. Panoff
Matthew C. Sostrin
Clare E. Myers
MAYER BROWN LLP
71 South Wacker Drive
Chicago, Illinois 60606
(312) 782-0600
lnale@mayerbrown.com
tpanoff@mayerbrown.com
msostrin@mayerbrown.com
cmyers@mayerbrown.com

Counsel for Defendants Wintrust Financial

Corporation and Barrington Bank & Trust Co.,
N.A.
 Case: 1:22-cv-02759 Document #: 15 Filed: 08/01/22 Page 2 of 23 PageID #:34

TABLE OF CONTENTS
Page

INTRODUCTION ......................................................................................................................... 1
BACKGROUND ........................................................................................................................... 2
ARGUMENT ................................................................................................................................. 4
I. The Complaint Fails To State Discrimination Claims (Counts I-IV). ............................... 4
A. Plaintiff’s Disparate Impact Theory Fails. ............................................................. 5
1. Plaintiff Fails To Identify Any Wintrust Policy That Allegedly
Caused Purported Statistical Disparities. ................................................... 5
2. Regulators And Courts Have Expressly Cautioned Against Using
HMDA Data Alone To Identify Discriminatory Lending. ........................ 7
B. Plaintiff Fails To State A Claim For Intentional Discrimination......................... 10
II. The Complaint Fails To State Claims Over Alleged Promises To Provide The
Lowest Available Rates, Favorable Terms, And A Free Float Down (Counts V-
VII). .................................................................................................................................. 11
A. The Complaint Fails To State A Breach Of Contract Claim (Count VII). .......... 12
B. The Complaint Fails To State A Promissory Estoppel Claim (Count V). ........... 13
C. The Complaint Fails To State A Fraudulent Inducement Claim (Count VI). ...... 14
III. The Complaint Fails To State A Claim Against WFC. ................................................... 15
CONCLUSION ............................................................................................................................ 15

1
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TABLE OF AUTHORITIES

Page(s)

Cases

All-Tech Telecom, Inc. v. Amway Corp.,

174 F.3d 862 (7th Cir. 1999) .............................................................................................13, 15

Alleyne v. Flagstar Bank, FSB,

2008 8901271 (D. Mass. Sept. 12, 2008) ................................................................................10

Alston v. City of Madison,

853 F.3d 901 (7th Cir. 2017) ...................................................................................................10

Ashcroft v. Iqbal,
556 U.S. 662 (2009) ...................................................................................................4, 9, 10, 11

Bailey v. PHH Mortg. Corp.,

2021 WL 4478700 (D. Md. Sept. 30, 2021) ..............................................................................6

Bell Atl. Corp. v. Twombly,

550 U.S. 544 (2007) ...................................................................................................................4

Beraha v. Baxter Health Care Corp.,

956 F.2d 1436 (7th Cir. 1992) .................................................................................................12

Cartwright v. Am. Savings & Loan,

880 F.2d 912 (7th Cir. 1989) .....................................................................................................9

Chen v. Urban Partnership Bank,

2016 WL 7188165 (N.D. Ill. Dec. 12, 2016) .............................................................................6

City of Joliet, Ill. v. New West, L.P.,

825 F.3d 827 (7th Cir. 2016) .....................................................................................................6

Cnty. of Cook v. Bank of Am. Corp.,

--- F. Supp. 3d ---, 2022 WL 408299 (N.D. Ill. Feb. 10, 2022) ...........................................6, 10

Cook Cnty. Republican Party v. Pritzker,

487 F. Supp. 3d 705 (N.D. Ill. 2020) .........................................................................................1

Crear v. JPMorgan Chase Bank, N.A.,

491 F. Supp. 3d 207 (N.D. Tex. 2020) ......................................................................................2

Demos v. Nat’l Bank of Greece,

567 N.E.2d 655 (Ill. App. Ct. 1991) ..................................................................................12, 14

ii
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Dumas v. Infinity Broadcasting Corp.,

416 F.3d 671 (7th Cir. 2005) .............................................................................................13, 14

Dynegy Marketing & Trade v. Multiut Corp.,

648 F.3d 506 (7th Cir. 2011) ...................................................................................................12

Ellis v. City of Minneapolis,

860 F.3d 1106 (8th Cir. 2017) ...................................................................................................6

Frederick v. Wells Fargo Home Mortgage,

649 F. App’x 29 (2d Cir. 2016) .................................................................................................6

Gadsby v. Norwalk Furniture Corp.,

71 F.3d 1324 (7th Cir. 1995) ...................................................................................................13

Gagnon v. Schickel,
2012 IL App (1st) 120645........................................................................................................15

Griffin v. Green Tree Servicing, LLC,

166 F. Supp. 3d 1030 (C.D. Cal. 2015) .....................................................................................2

Hall v. Nat’l Collegiate Athletic Ass’n,

985 F. Supp. 782 (N.D. Ill. 1997) ..............................................................................................4

Hoffman v. Option One Mortgage Corp.,

589 F. Supp. 2d 1009 (N.D. Ill. 2008) .......................................................................................7

Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec,

529 F.3d 371 (7th Cir. 2008) ...................................................................................................15

King v. Ashbrook,
732 N.E.2d 621 (Ill. App. Ct. 2000) ........................................................................................12

Kinsella v. Cap. One, N.A.,

2018 WL (N.D. Ill. Nov. 9, 2018) .............................................................................................1

Lee v. Bd. of Governors of the Fed. Reserve Sys.,

118 F.3d 905 (2d Cir. 1997).......................................................................................................9

McClearly v. Wells Fargo Securities, L.L.C.,

2015 IL App (1st) 141287........................................................................................................12

Merrilees v. Merrilees,
2013 IL App (1st) 121897........................................................................................................15

Merritt v. Countrywide Fin. Corp.,

2015 WL 5542992 (N.D. Cal. Sept. 17, 2015) ..........................................................................7

iii
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Nathaniel v. Hertz Location Edition Corp.,

2020 WL 833096 (E.D. Mich. Feb. 20, 2020) ...........................................................................6

Newton Tractor Sales, Inc. v. Kubota Tractor Corp.,

906 N.E.2d 520 (Ill. 2009) .......................................................................................................14

Olson v. Hunter’s Point Homes, LLC,

2012 IL App (5th) 100506 .......................................................................................................13

Owens v. Wells Fargo Bank, N.A.,

2016 WL 1407699 (N.D. Ill. Apr. 11, 2016) ...........................................................................13

Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Walgreen Co.,
631 F.3d 436 (7th Cir. 2011) ...................................................................................................15

Prop. Cas. Insurers Ass’n of Am. v. Carson,

2017 WL 2653069 (N.D. Ill. June 20, 2017) .............................................................................6

Radue v. Kimberly-Clark Corp.,

219 F.3d 612 (7th Cir. 2000) ...................................................................................................11

Rummery v. Ill. Bell Tel. Co.,

250 F.3d 553 (7th Cir. 2001) ...................................................................................................11

Soto v. City of W. Chi.,

2010 WL 4810612 (N.D. Ill. Nov. 19, 2010) ..........................................................................11

Steele v. GE Money Bank,

2009 WL 393860 (N.D. Ill. Feb. 17, 2009) ...........................................................................5, 7

STOPS Enters., LLC v. United Med. Equip. Co.,

2014 WL 2699723 (N.D. Ill. June 13, 2014) ...........................................................................12

TBS Group, LLC v. City of Zion, Ill.,

2017 WL 5129008 (N.D. Ill. Nov. 6, 2017) ............................................................................11

Tex. Dep’t of Housing & Cmty. Affairs v. Inclusive Cmtys. Project, Inc.,
576 U.S. 519 (2015) .......................................................................................................2, 5, 6, 7

Thomas v. First Fed. Savings Bank of Ind.,

653 F. Supp. 1330 (N.D. Ind. 1987) ........................................................................................10

Zabriskie v. Fed. Nat’l Mortg. Ass’n,

940 F.3d 1022 (9th Cir. 2019) ...................................................................................................3

Statutes

12 U.S.C. §§ 2801-2810 ..................................................................................................................1

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42 U.S.C. § 1981 ..............................................................................................................................4

42 U.S.C. § 1982 ..............................................................................................................................4

740 ILCS 80/2 ................................................................................................................................12

Other Authorities

Fed. R. Civ. P. 9(b) ........................................................................................................................14

Fed. R. Civ. P. 12(b)(6)....................................................................................................................4

12 C.F.R. § 1003.1(b)(1) ..................................................................................................................8

Policy Statement on Discriminatory Lending, 59 Fed. Reg. 18266, 18269 (Apr.

15, 1994) ....................................................................................................................................8

37 C.J.S. Statute of Frauds § 94 .....................................................................................................13

CFPB, Summary of 2021 Data on Mortgage Lending (June 16, 2022), available
at https://bit.ly/3cch5pe..............................................................................................................8

FFIEC, Press Release, FFIEC Announces Availability of 2019 Data on Mortgage

Lending (June 24, 2020), available at https://bit.ly/3cilVS1.....................................................9

Julia Stackhouse, St. Louis Federal Reserve, available at https://bit.ly/3cfc92T............................9

Robert Avery et al., New Information Reported under HMDA and Its Application
in Fair Lending Enforcement, 91 Fed. Res. Bull. 344, 393 (2005) available at
https://bit.ly/3IIkAzN .................................................................................................................9

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INTRODUCTION

Wintrust Financial Corporation (“WFC”) and Barrington Bank & Trust Co., N.A.

(“Barrington”) (collectively, “Wintrust”) have an established record over their long history of

ensuring that all customers are treated fairly. Plaintiff’s allegations of discrimination are not only

baseless, but also contrary to Wintrust’s core fair lending principles. In addition to actively

partnering with many civic groups throughout the Chicago region to ensure affordable access to

mortgage lending and other banking services,1 Wintrust consistently earns top ratings from federal

regulators in its fair lending-related Community Reinvestment Act examinations. Barrington and

its Wintrust Mortgage division received an “Outstanding” rating from the Office of the

Comptroller of the Currency in its two most recent multi-year Community Reinvestment Act

reviews—reviews in which the OCC examines whether there is “evidence of discriminatory or

other illegal credit practices.”2

Against this reality, Plaintiff alleges both disparate impact and intentional discrimination

based solely on purported statistical disparities in public data. In particular, she relies on an

unspecified “analysis” of data provided under the Home Mortgage Disclosure Act (“HMDA”), 12

U.S.C. §§ 2801-2810, to allege in conclusory fashion that there are improper disparities in

Wintrust’s nationwide loan approval and denial rates, fees, and average interest rates.

1
See, e.g., Judith Crown, “This Feels Like a Different Moment,” Crain’s Chicago Business (Feb. 11,
2022) (Wintrust donated $9.25 million to the Chicago Community Loan Fund, a community development
fund to “support African American, Latino and other business developers of color”), available at
https://bit.ly/3BaYbt8. “The Court may take judicial notice of the existence of new articles[.]” Cook Cnty.
Republican Party v. Pritzker, 487 F. Supp. 3d 705, 713 n.3 (N.D. Ill. 2020).
2
CRA Performance Evaluations (Public Disclosure) by the OCC dated June 7, 2021 (available at
https://bit.ly/3B0UrKQ) and June 6, 2018 (available at https://bit.ly/3odzPrh). OCC reports are proper
subjects for judicial notice. Kinsella v. Cap. One, N.A., 2018 WL at *3 (N.D. Ill. Nov. 9, 2018).

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Plaintiff’s Complaint is misguided and deficient as a matter of law on a number of grounds.

Plaintiff does not come close to stating a plausible claim for race discrimination (Counts I-IV).

Plaintiff ignores well-established Supreme Court precedent holding that alleged statistical

disparities alone are not enough to state a disparate impact claim. Plaintiff is required to allege

that Wintrust caused alleged statistical disparities by tying disparities to Wintrust’s specific

policies. See Tex. Dep’t of Housing & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 576 U.S.

519, 543-44 (2015). The Complaint makes no attempt to do so. In fact, Plaintiff does not identify

a single Wintrust policy anywhere in her entire Complaint. This failure is especially problematic

because regulators and courts have explicitly warned that HMDA data alone cannot show

discrimination because the data do not take into account legitimate underwriting standards. The

Complaint also alleges no facts, nor are there any, to suggest that Wintrust intentionally

discriminated against Plaintiff.

Plaintiff’s common law claims for breach of contract, promissory estoppel, and fraudulent

inducement (Counts V-VII) are equally baseless and should be dismissed as a matter of law. The

Complaint vaguely alleges that Wintrust contractually agreed, promised, or represented that it

would provide the lowest interest rate, favorable terms, and a free “float down.” But the Complaint

does not identify any enforceable agreement, promise, or representation—in Plaintiff’s mortgage

or otherwise—let alone that Wintrust breached any such commitment.

BACKGROUND

On June 3, 2020, Plaintiff obtained a conventional, 30-year mortgage loan from Wintrust

Mortgage for her property located at 431 East 48th Street in Chicago, Illinois. Ex. A, Mortgage.3

3
Although Plaintiff did not attach her mortgage to the complaint, the Court may take judicial notice
of the mortgage because it is a public record. See, e.g., Crear v. JPMorgan Chase Bank, N.A., 491 F. Supp.
3d 207, 212-13 (N.D. Tex. 2020); Griffin v. Green Tree Servicing, LLC, 166 F. Supp. 3d 1030, 1040 (C.D.

2
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The loan has a fixed, 3.25% interest rate. See id. at 2. Plaintiff’s mortgage was a Fannie Mae loan.

See, e.g., id. at 1 (Illinois, single family Fannie Mae/Freddie Mac uniform instrument Form 3014

1/01). As a result, Plaintiff’s mortgage was underwritten through Fannie Mae’s standard and

widely-used Desktop Underwriter (“DU”) program, not through proprietary algorithms or

underwriting standards unique to Wintrust. See, e.g., Zabriskie v. Fed. Nat’l Mortg. Ass’n, 940

F.3d 1022, 1025-26 (9th Cir. 2019) (explaining that Fannie Mae “licenses DU” to lenders, which

“use[] DU to underwrite [] loan[s]” for purchase by Fannie Mae).

Plaintiff filed her Complaint on May 25, 2022, nearly two years after the alleged

discrimination. The Complaint alleges in conclusory fashion that Wintrust “forced Plaintiff into a

mortgage with a higher interest rate, higher costs and fees, and fewer credits than Wintrust charged

to similarly situated non-African American borrowers.” Compl. ¶ 27. And the Complaint relies

exclusively on an unidentified “analysis of nationwide data published under [HMDA]” involving

Wintrust’s loan approval and denial rates, fees as a percentage of loan value, and average interest

rates by the borrower’s race. Id. ¶¶ 8-16. The Complaint alleges that these purported differences

in loan approval and denial rates, fees, and average interest rates by the borrower’s race are

“statistically significant” and not caused by “random chance.” Id. ¶ 9.4

Importantly, however, the Complaint contains no exhibits and does not allege: (i) any facts

suggesting racial animus in Plaintiff’s loan origination process; (ii) any facts comparing Plaintiff’s

loan terms to similarly situated white borrowers in the same geographic area with similar credit

Cal. 2015).
4
Although the Complaint makes allegations concerning HMDA data for both purchases and
refinances, Plaintiff’s mortgage loan was a purchase. There is no allegation that Plaintiff refinanced with
Wintrust Mortgage.

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profiles who received loans around the same time as Plaintiff; or (iii) any Wintrust policy that

purportedly caused the alleged statistical disparities in the HMDA data.

ARGUMENT

To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009). “A claim has facial plausibility” only “when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. Thus, a complaint must allege sufficient factual matter to cross “the line

between possibility and plausibility.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558-59 (2007)

(emphasis added); Iqbal, 556 U.S. at 680-81 (a plaintiff must “‘nudge her claims’ of invidious

discrimination ‘across the line from conceivable to plausible’”).

I. The Complaint Fails To State Discrimination Claims (Counts I-IV).

Counts I-IV attempt to assert claims for race discrimination under the Equal Credit

Opportunity Act (“ECOA”), 42 U.S.C. § 1981 (“Section 1981”), 42 U.S.C. § 1982 (“Section

1982”), and the Fair Housing Act (“FHA”). While not entirely clear, it appears that Plaintiff

alleges intentional discrimination in each count, and a disparate impact theory under ECOA,

Section 1982, and the FHA (but not Section 1981). See Compl. ¶¶ 40, 46, 51, 57.5 All of these

claims suffer from the same fundamental defect—Plaintiff has not plausibly alleged

discrimination, nor is there any basis to do so. Plaintiff relies exclusively on HMDA data, but

HMDA data alone cannot support either a disparate impact theory or intentional discrimination.

5
Like Section 1981, Section 1982 has been “unambiguously interpreted to require purposeful
discrimination, and not disparate impact, in order to support a claim.” Hall v. Nat’l Collegiate Athletic
Ass’n, 985 F. Supp. 782, 798 (N.D. Ill. 1997). Thus, Plaintiff may pursue disparate impact theories only
under the FHA and ECOA, not Sections 1981 and 1982.

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A. Plaintiff’s Disparate Impact Theory Fails.

To “protect potential defendants against abusive disparate-impact claims” and ensure their

“prompt resolution,” the Supreme Court has emphasized that it is “important” to “examine with

care whether a plaintiff has made out a prima facie case … at the pleading stage.” Inclusive Cmtys.,

576 U.S. at 543-44. Inclusive Communities thus placed “limitations on disparate-impact liability”

and established pleading requirements. Id. at 544. A plaintiff must: (1) present statistical evidence

of a “disparate impact,” (2) identify a specific “policy” of the defendant, and (3) establish a

“robust” “causal connection” between the two. Id. at 543-44. A “plaintiff who fails to allege facts

at the pleading stage” supporting these elements cannot proceed. Id. at 543.6

Plaintiff’s disparate impact theory fails as a matter of law. The Supreme Court made clear

in Inclusive Communities that alleged statistical disparities alone are not enough absent a

defendant’s policy that caused the disparities. Yet the Complaint fails to identify any Wintrust

policy at all, let alone a discriminatory one. Plaintiff’s failure to identify even a single policy is

especially problematic because regulators and courts have expressly cautioned against relying on

HMDA data alone to identify discrimination—as Plaintiff does here—because the data do not take

into account legitimate underwriting standards that often explain alleged disparities.

1. Plaintiff Fails To Identify Any Wintrust Policy That Allegedly Caused

Purported Statistical Disparities.

Under Inclusive Communities, “a disparate-impact claim that relies on a statistical disparity

must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity.”

6
Although Inclusive Communities addressed disparate impact claims under the FHA, courts have
applied these same limitations to disparate impact claims under ECOA. See, e.g., Steele v. GE Money Bank,
2009 WL 393860, at *3 (N.D. Ill. Feb. 17, 2009) (“To allege a disparate impact claim under both the ECOA
and the FHA, a plaintiff must: (1) identify a specific practice or policy adopted by a defendant;
(2) demonstrate a disparate impact on a protected group; and (3) show a causal relationship between the
challenged practice and the alleged disparate impact.”).

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576 U.S. at 542. Accordingly, there are two essential prongs (besides the disparity itself) that must

be satisfied at the pleading stage: (i) identification of a specific policy; and (ii) causation. In

addition to identifying a specific policy, the Supreme Court imposed a “robust causality

requirement” because it acknowledged that “racial imbalance[s]” exist and sought to “protect

defendants from being held liable for racial disparities they did not create.” Id. Thus, a plaintiff

must “point to a specific policy and show that it created ‘artificial, arbitrary, and unnecessary

barriers’ to equality.” Cnty. of Cook v. Bank of Am. Corp., --- F. Supp. 3d ---, 2022 WL 408299,

at *1 (N.D. Ill. Feb. 10, 2022) (quoting Inclusive Cmtys., 576 U.S. at 543) (emphasis added);

accord Prop. Cas. Insurers Ass’n of Am. v. Carson, 2017 WL 2653069, at *8 (N.D. Ill. June 20,

2017); see City of Joliet, Ill. v. New West, L.P., 825 F.3d 827, 830 (7th Cir. 2016) (“Disparate-

impact analysis looks at the effect of policies … which are analyzed for disparate treatment.”).

In the wake of Inclusive Communities, courts have repeatedly dismissed claims at the

pleading stage where, as here, alleged statistical disparities are not tied to specific policies that

purportedly caused the alleged disparities. See, e.g., Ellis v. City of Minneapolis, 860 F.3d 1106,

1113-14 (8th Cir. 2017) (rejecting “conclusory” allegations and holding that plaintiff failed to

“point to an ‘artificial, arbitrary, and unnecessary’ policy causing the problematic disparity”);

Frederick v. Wells Fargo Home Mortgage, 649 F. App’x 29, 30 (2d Cir. 2016) (affirming dismissal

because plaintiffs “failed to identify any specific policy or practice of the defendants that had [a

disparate] effect”); Chen v. Urban Partnership Bank, 2016 WL 7188165, at *4 (N.D. Ill. Dec. 12,

2016) (“[T]o survive dismissal … , [plaintiff] would need to specify a ‘practice or policy

responsible for the disparate impact.’”); Bailey v. PHH Mortg. Corp., 2021 WL 4478700, at *8

(D. Md. Sept. 30, 2021) (conclusory allegations cannot “establish[] a ‘causal connection,’ let alone

a robust one”); Nathaniel v. Hertz Location Edition Corp., 2020 WL 833096, at *5-6 (E.D. Mich.

6
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Feb. 20, 2020) (rejecting “conclusory” policy and causation allegations); Merritt v. Countrywide

Fin. Corp., 2015 WL 5542992, at *18 (N.D. Cal. Sept. 17, 2015) (“Plaintiffs … fail to identify a

specific policy that is causally linked to this alleged disparity.”).7

Plaintiff’s conclusory and generic policy and causation allegations are plainly deficient.

Plaintiff relies on HMDA data to show alleged statistical disparities without alleging any facts to

plausibly suggest that Wintrust’s policies caused those disparities. The Complaint devotes a

single, vague paragraph to Wintrust’s policies. Compl. ¶ 7. It alleges that Wintrust engaged in “a

number of practices” that purportedly lead to racial disparities, but never identifies a single actual

policy besides vague references to “proprietary algorithms and sales policies.” Id. It also never

alleges how these unnamed “number of practices” cause purported disparities apart from a

conclusory allegation that they somehow, in some unexplained way, “encourage imposing high

costs and fees on Black and/or African American borrowers.” Id. Without identifying any

Wintrust policy, or alleging beyond mere conjecture how such an unidentified policy resulted in

discrimination, Plaintiff does not even approach the level of specificity required under Inclusive

Communities and its progeny.

2. Regulators And Courts Have Expressly Cautioned Against Using

HMDA Data Alone To Identify Discriminatory Lending.

The very nature and limitations of HMDA data confirm the importance of the “robust

causality requirement” established by Inclusive Communities, 576 U.S. at 542, and why Plaintiff’s

tactic here is misguided. Regulators and courts have expressly cautioned against relying on

HMDA data alone to identify discriminatory lending because HMDA data on loan approval and

7
Courts in this district required plaintiffs to tie an alleged statistical disparity to specific policies
even before Inclusive Communities. See, e.g., Hoffman v. Option One Mortgage Corp., 589 F. Supp. 2d
1009, 1011 (N.D. Ill. 2008) (“Plaintiffs must identify a specific practice or policy responsible for the
disparate impact.”); Steele, 2009 WL 393860, at *3 (“[A] plaintiff alleging disparate impact … must
identify a specific business practice or policy that gives rise to the alleged disparate impact.”).

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denial rates, fees, and interest rates alleged by Plaintiff do not take into account legitimate

underwriting standards such as credit scores, income-to-value ratios, etc. Thus, unless Plaintiff

identifies specific Wintrust policies that allegedly caused any statistical disparities in approval and

rejection rates, fees, and interest rates, Wintrust would face the prospect of liability “for racial

disparities [it] did not create.” Inclusive Cmtys., 576 U.S. at 542.

HMDA’s implementing regulations explain that the statute’s purpose is to provide loan

data that can be used to “assist in identifying possible discriminatory lending patterns.” 12 C.F.R.

§ 1003.1(b)(1) (emphasis added). Yet regulators have made clear that “[d]ata reported by lenders

under the HMDA do not, standing alone, provide sufficient information [to find discrimination]

because they omit important variables” and do not “control[] for possible legitimate explanations

for differences in treatment.” Policy Statement on Discriminatory Lending, 59 Fed. Reg. 18266,

18269 (Apr. 15, 1994); id. at 18270 (“Q1: Are disparities in the application, approval, and denial

rates revealed by HMDA data sufficient to establish lending discrimination? A. HMDA data

alone do not prove lending discrimination. The data do not contain enough information on major

credit-related factors … to prove discrimination.”).

Just this summer, the Consumer Financial Protection Bureau (“CFPB”) warned against

Plaintiff’s exact approach in this lawsuit and confirmed that:

HMDA data are generally not used alone to determine whether a lender is
complying with fair lending laws. The data do not include some legitimate
credit risk considerations for loan approval and pricing decisions.
Therefore, when regulators conduct fair lending examinations, they
analyze additional information before reaching a determination about an
institution’s compliance with fair lending laws.

CFPB, Summary of 2021 Data on Mortgage Lending (June 16, 2022), available at

https://bit.ly/3cch5pe. The Federal Financial Institutions Examination Council (“FFIEC”),

representing the Federal Reserve, FDIC, National Credit Union Administration, OCC, and CFPB,

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has provided the same warning. See FFIEC, Press Release, FFIEC Announces Availability of

2019 Data on Mortgage Lending (June 24, 2020), available at https://bit.ly/3cilVS1.

Although regulators use HMDA data to investigate “possible” discrimination, 12 C.F.R. §

1003.1(b)(1) (emphasis added), those investigations usually conclude that statistical disparities in

HMDA data are not caused by discriminatory lending. See, e.g., Julia Stackhouse, St. Louis

Federal Reserve, Do [HMDA] Data Prove Lending Discrimination? (Mar. 21, 2018) (explaining

that after factoring in legitimate underwriting standards and performing more detailed reviews,

“[i]t is rare for examiners to find discrimination” even where HMDA data shows disparities),

available at https://bit.ly/3cfc92T; Robert Avery et al., New Information Reported under HMDA

and Its Application in Fair Lending Enforcement, 91 Fed. Res. Bull. 344, 393 (2005) (finding that

controlling for legitimate underwriting standards leads to “a sizable narrowing, at both the

aggregate and institution levels, in the … differences in the incidence of higher-priced lending

between minority and nonminitory groups,” “strongly indicat[ing] that the raw data alone can lead

to inaccurate conclusions, which in turn may be unfair to particular institutions”), available at

https://bit.ly/3IIkAzN. That is why HMDA data alone cannot be used to state a “plausible”

discrimination claim. Iqbal, 556 U.S. at 680-81 (emphasis added).

Courts have also long recognized that HMDA data alone cannot show discriminatory

lending. See, e.g., Lee v. Bd. of Governors of the Fed. Reserve Sys., 118 F.3d 905, 915 (2d Cir.

1997) (affirming Federal Reserve Board’s conclusion that “HMDA data standing alone are not

sufficient for conclusively determining whether an institution has engaged in illegal discrimination

in making lending decisions”); Cartwright v. Am. Savings & Loan, 880 F.2d 912, 922 (7th Cir.

1989) (holding that alleged disparities between white and African-American loan approval and

rejection rates are insufficient to establish mortgage discrimination because approval and rejection

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rates alone do not address whether “financially qualified borrowers” are being rejected); Alleyne

v. Flagstar Bank, FSB, 2008 8901271, at *4 n.5 (D. Mass. Sept. 12, 2008) (finding that alleged

racial disparities in HMDA data are “consistent with non-discriminatory loans based solely on

credit scores” and thus to “allow this data to overcome plaintiff’s failure to allege facts connecting

[defendant’s] … [p]olicy with a disparate impact on black borrowers would eviscerate the

requirement to plead a causal relationship between the two after controlling for credit risk”);

Thomas v. First Fed. Savings Bank of Ind., 653 F. Supp. 1330, 1340 (N.D. Ind. 1987) (HMDA

data “standing alone, does not establish that race played any part in [the bank’s] decisions to make

loans to people in Gary; no reasonable inferences can be drawn in that direction”). And yet,

Plaintiff offers nothing more than HMDA data in an attempt to state a claim.

B. Plaintiff Fails To State A Claim For Intentional Discrimination.

Although Plaintiff does not come close to alleging disparate impact, she is even further

from plausibly alleging intentional discrimination. To state a claim for intentional discrimination,

the Complaint must allege sufficient factual matter that Wintrust “under[took] a course of action

because of, not merely in spite of, [the action’s] effects upon an identifiable group.” Iqbal, 556

U.S. at 676-77 (emphasis added). Plaintiff must allege that Wintrust had a “discriminatory

purpose,” which “means more than simple knowledge that a particular outcome is the likely

consequence of an action.” Alston v. City of Madison, 853 F.3d 901, 907 (7th Cir. 2017). As a

result, “statistical disparities … are rarely sufficient to raise an inference of intentional

discrimination.” Cnty. of Cook, 2022 WL 408299, at *5. “[D]isparate impact alone is almost

always insufficient to prove discriminatory purpose.” Alston, 853 F.3d at 907.

Plaintiff has not alleged any facts to support a claim for intentional discrimination. As

shown above, Plaintiff has not alleged any disparate impact caused by Wintrust in the first place.

HMDA data alone cannot show discrimination, let alone purposeful discrimination, because the

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data do not take into account legitimate underwriting standards. And to show intentional

discrimination, “[s]tatistical evidence must … take ‘into account nondiscriminatory

explanations.’” Rummery v. Ill. Bell Tel. Co., 250 F.3d 553, 559 (7th Cir. 2001) (quoting Radue

v. Kimberly-Clark Corp., 219 F.3d 612, 616 (7th Cir. 2000)). HMDA data does not purport to

account for nondiscriminatory explanations, as regulators have made clear.

Plaintiff does not allege any other facts to support a claim that Wintrust intentionally

discriminated because of her race. In the mere nine paragraphs of her Complaint where she

discusses her own loan (Compl. ¶¶ 20-28), Plaintiff does not allege any facts suggesting racial

animus in her loan origination process. She merely alleges generically that Wintrust “maintain[s]

policies and practices that are intentionally discriminatory” (id. ¶ 34) without identifying any such

policies or practices. Iqbal rejected similarly “bald” and “conclusory” allegations of intentional

discrimination. 556 U.S. at 680-81; see TBS Group, LLC v. City of Zion, Ill., 2017 WL 5129008,

at *5 (N.D. Ill. Nov. 6, 2017) (rejecting conclusory allegation that defendant selectively enforced

housing ordinance against landlords that rent to racial minorities); Soto v. City of W. Chi., 2010

WL 4810612, at *7 (N.D. Ill. Nov. 19, 2010) (rejecting conclusory allegation that defendant

selectively enforced building code or acted with a discriminatory purpose). As such, Plaintiff’s

theory of intentional discrimination also is grossly deficient as a matter of law.

II. The Complaint Fails To State Claims Over Alleged Promises To Provide The Lowest
Available Rates, Favorable Terms, And A Free Float Down (Counts V-VII).

Apart from alleged discrimination, in Counts V-VII, the Complaint vaguely alleges that

Wintrust contractually agreed, promised, or represented that it would “offer Plaintiff the lowest

available interest rate, favorable terms and conditions, and a free ‘float down’ should market rates

decrease.” Compl. ¶¶ 61, 67, 74. These vague allegations fail to state a plausible claim either for

breach of contract, promissory estoppel, or fraudulent inducement.

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A. The Complaint Fails To State A Breach Of Contract Claim (Count VII).

The Complaint alleges a breach of contract (in the “alternative” to promissory estoppel).

To state a contact claim, Plaintiff must allege “(1) the existence of a valid and enforceable contract;

(2) performance by the plaintiff; (3) a breach of the subject contract by the defendant; and (4) that

the defendant’s breach resulted in damages.” McClearly v. Wells Fargo Securities, L.L.C., 2015

IL App (1st) 141287, ¶ 19. Moreover, the “essential terms of a contract must be definite and

certain for a contract to be enforceable,” allowing “the trial court [to] ascertain what the parties

agreed.” King v. Ashbrook, 732 N.E.2d 621, 625 (Ill. App. Ct. 2000).

Plaintiff does not, and cannot, allege the existence of a valid and enforceable contractual

obligation to provide the “lowest” rate or “favorable” terms. These alleged obligations are far too

indefinite to form an enforceable contract. See, e.g., Dynegy Marketing & Trade v. Multiut Corp.,

648 F.3d 506, 516 (7th Cir. 2011) (“Vague statements about ‘best’ prices do not an agreement

make[.]”); Beraha v. Baxter Health Care Corp., 956 F.2d 1436, 1441 (7th Cir. 1992) (holding that

defendant’s statement that it would “do [its] very best” “is merely a vague expression of goodwill”

and “not an enforceable contractual promise”); STOPS Enters., LLC v. United Med. Equip. Co.,

2014 WL 2699723, at *6 (N.D. Ill. June 13, 2014) (“Like ‘best price,’ the term ‘lowest rate

guarantee’ is vague and uncertain.”); Demos v. Nat’l Bank of Greece, 567 N.E.2d 655, 661 (Ill.

App. Ct. 1991) ( “prevailing rate” was “so indefinite as to be unenforceable”).

Plaintiff also does not, and cannot, allege that Wintrust breached any obligation to provide

the “lowest” rate, “favorable” terms, or a free float down. Plaintiff does not identify what better

interest rate or terms or conditions she was supposedly entitled to at the time. Plaintiff instead

relies on nationwide HMDA data, which does not purport to identify interest rates or fees for

borrowers who were similarly situated to Plaintiff.

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Plaintiff’s breach of contract claim is also barred by the statute of frauds. The statute of

frauds requires that “any contract for the sale of lands … or any interest in or concerning them”—

which includes mortgages—must be in writing. 740 ILCS 80/2; see, e.g., Owens v. Wells Fargo

Bank, N.A., 2016 WL 1407699, at *3 (N.D. Ill. Apr. 11, 2016) (holding that alleged oral agreement

to modify mortgage was “far too vague to support a claim” and was “unlikely to be enforceable”

under statute of frauds); 37 C.J.S. Statute of Frauds § 94 (“A contract affecting a mortgage falls

squarely within the statute of frauds.”). Plaintiff’s mortgage contains no obligation to offer the

“lowest” rate, “favorable” terms and conditions, or a free float down, and any alleged oral

agreement on those matters is unenforceable under the statute of frauds. According, the Complaint

fails to allege a plausible claim for breach of contract.

B. The Complaint Fails To State A Promissory Estoppel Claim (Count V).

Plaintiff cannot use a promissory estoppel claim to avoid the fatal flaws in her breach of

contract claim—even by attempting to plead her breach of contract claim in the “alternative” to

promissory estoppel. Compl. p. 14. It is well settled that “[p]romissory estoppel is unavailable

when an enforceable contract between the parties exists.” Olson v. Hunter’s Point Homes, LLC,

2012 IL App (5th) 100506, ¶ 13; see Gadsby v. Norwalk Furniture Corp., 71 F.3d 1324, 1333 (7th

Cir. 1995) (declining to “depart[] from the general rule that promissory estoppel is unavailable

where an express contract exists”). For this reason alone, Plaintiff cannot rely on promissory

estoppel where contracts—her mortgage and note—govern the parties’ relationship.

Even if promissory estoppel were somehow available, “[t]he absence of the essential

elements of a contract also effectively foreclose any legitimate promissory estoppel argument

[because] Illinois law requires that, but for consideration, all other elements of a contractual

agreement exist in conjunction with such a claim.” Dumas v. Infinity Broadcasting Corp., 416

F.3d 671, 678 (7th Cir. 2005); accord All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862, 869

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(7th Cir. 1999) (“‘Promissory estoppel is not a doctrine designed to give a party … a second bite

at the apple in the event it fails to prove a breach of contract.’”). Plaintiff’s promissory estoppel

claim therefore fails for the same reasons as her breach of contract claim.

To state a claim for promissory estoppel, Plaintiff is required to allege that “(1) defendant

made an unambiguous promise to plaintiff, (2) plaintiff relied on such promise, (3) plaintiff’s

reliance was expected and foreseeable by defendants, and (4) plaintiff relied on the promise to

[her] detriment.” Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 906 N.E.2d 520, 523-24

(Ill. 2009). Like her contract claim, an alleged agreement to provide the “lowest” rate or

“favorable” terms is not an enforceable, unambiguous promise, nor is it a promise that a plaintiff

can rely on. See, e.g., Demos, 209 Ill. App. 3d at 661-62 (holding that because alleged contract

was “so indefinite as to be unenforceable, the doctrine of promissory estoppel … is inapplicable

as a matter of law” because “there must be a promise”). And like her contract claim, Plaintiff has

not alleged, and cannot allege, that Wintrust breached any enforceable, unambiguous promise.

Plaintiff also cannot use a promissory estoppel claim to get around the statute of frauds. See, e.g.,

Dumas, 416 F.3d at 678 (holding that the statute of frauds “applies with equal force under either a

breach of contract or promissory estoppel theory”). Plaintiff’s inability to state a plausible claim

for breach of contract therefore defeats her promissory estoppel claim too.

C. The Complaint Fails To State A Fraudulent Inducement Claim (Count VI).

Plaintiff’s fraudulent inducement claim fares no better than her breach of contract and

promissory estoppel claims—especially in light of the heightened pleading standard for fraud. See

Fed. R. Civ. P. 9(b). To state a claim for fraudulent inducement, Plaintiff must allege “(1) a false

statement of material fact; (2) defendant’s knowledge that the statement was false; (3) defendant’s

intent to induce plaintiff’s reliance on the statement; (4) plaintiff’s reasonable reliance upon the

truth of the statement; and (5) plaintiff’s damages resulting from reliance on the statement.”

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Merrilees v. Merrilees, 2013 IL App (1st) 121897, ¶ 30. And to plead fraud with the required

particularity, Plaintiff “generally must describe the ‘who, what, when, where, and how’ of the

fraud—‘the first paragraph of any newspaper story.’” Pirelli Armstrong Tire Corp. Retiree

Medical Benefits Trust v. Walgreen Co., 631 F.3d 436, 441-42 (7th Cir. 2011).

The Complaint does not allege any factual details concerning Plaintiff’s vague allegations

that Wintrust represented that it would provide the lowest rate, favorable terms, and a free float

down (Compl. ¶ 67)—e.g., who allegedly made the statements, when or how the statements were

allegedly made, etc. Moreover, even if Plaintiff provided more detail, alleged statements that

Wintrust would provide the “lowest” rates or “favorable” terms are not statements of material fact,

nor are they statements that a borrower can reasonably rely on. See supra at 12, 14; All-Tech

Telecom, 174 F.3d at 868-69 (“puffing is not actionable as misrepresentation”). Statements “to do

something in the future” also do “not constitute a fraud,” even if a defendant “at the time [did] not

intend[] to perform the promise.” Gagnon v. Schickel, 2012 IL App (1st) 120645, ¶ 32. Plaintiffs’

fraudulent inducement claim should therefore be dismissed as well.

III. The Complaint Fails To State A Claim Against WFC.

Plaintiff also has no basis for naming WFC as a defendant. As the Complaint

acknowledges, WFC is a holding company for Barrington (and other subsidiaries). Compl. ¶¶ 4-

5. And Plaintiff obtained her loan from Wintrust Mortgage, a division of Barrington, not WFC.

See Mortgage at 2. The Complaint does not allege any basis, nor is there any, to pierce the

corporate veil to assert claims against WFC. See, e.g., Judson Atkinson Candies, Inc. v. Latini-

Hohberger Dhimantec, 529 F.3d 371, 378-79 (7th Cir. 2008) (corporate parent not liable for

liability of subsidiary). WFC therefore should be dismissed for this additional reason.

CONCLUSION

Wintrust respectfully requests that the Court dismiss the entire Complaint with prejudice.

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Dated: August 1, 2022 Respectfully submitted,

By: /s/ Thomas V. Panoff

Lucia Nale
Thomas V. Panoff
Matthew C. Sostrin
Clare E. Myers
MAYER BROWN LLP
71 South Wacker Drive
Chicago, Illinois 60606
(312) 782-0600
lnale@mayerbrown.com
tpanoff@mayerbrown.com
msostrin@mayerbrown.com
cmyers@mayerbrown.com

Counsel for Defendants Wintrust Financial

Corporation and Barrington Bank & Trust Co.,
N.A.

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CERTIFICATE OF SERVICE

The undersigned attorney certifies that a true and correct copy of the foregoing was served

upon all parties of record via the U.S. District Court for Northern District of Illinois’ Electronic

Filing System on August 1, 2022.

/s/ Thomas V. Panoff