United States Court of Appeals,

                                             Fifth Circuit.

                                            No. 94-20386.

                                Gordon D. SIMMS, et al., Plaintiffs,

                                Gordon D. Simms, Plaintiff-Appellee,

                                                   v.

                          FIRST GIBRALTAR BANK, et al., Defendants,

    First Gibraltar Bank, FSB, now known as First Madison Bank, FSB, Defendant-Appellant.

                                            May 31, 1996.

Appeal from the United States District Court for the Southern District of Texas.

Before JOLLY, DAVIS and EMILIO M. GARZA, Circuit Judges.

        E. GRADY JOLLY, Circuit Judge:

        In this Fair Housing Act case, Gordon D. Simms, a white landlord, contends that First

Gibraltar Bank violated the Act when it refused to issue a commitment letter to refinance its existing

loan on Simms' apartment complex in a predominantly minority area with a loan to a cooperative

housing corporation that probably would be minority owned. We hold that Simms failed to identify

any discriminatory policy, procedure, or practice on which to base a discriminatory effects claim. We

also hold that Simms failed to adduce sufficient evidence from which a reasonable jury could infer

intentional discrimination under a discriminatory treatment theory of liability. Accordingly, we

reverse the judgment of the district court and remand for entry of judgment in favor of First Gibraltar.

                                                   I

                                                   A

        Simms owned the Forest Garden Apartments (the "apartment complex"), a fifty-eight unit

complex located in a predominantly minority neighborhood in Houston, Texas. Simms purchased the

apartment complex in 1979, in part by assuming an existing non-recourse loan from Gibraltar Savings

Association ("GSA") secured by a first lien deed of trust on the property. Although GSA waived a
"due-on-sale" clause1 contained in the deed of trust, the clause continued in effect after the

transaction.

          Simms encountered numerous difficulties with the apartment complex, including tenant

problems and deteriorating conditions. He realized soon after purchasing the apartment complex that

it was not producing enough income to make all the necessary repairs. Simms eventually decided to

pursue a plan to convert the apartment complex into cooperative housing by rehabilitating and selling

it to a cooperative corporation that he planned to establish for that purpose (the "co-op").2

                                                  B

          The Department of Housing and Urban Development ("HUD") rental rehabilitation funds

from the city of Houston and permanent financing from National Cooperative Bank ("NCB")3 became

crucial components of Simms' plan. After years of negotiations between the city and Simms, the city

agreed that HUD rehabilitation funds could be used for cooperative housing. The city's planning

department, by letter dated November 2, 1988, notified Simms that it had retained on its active

waiting list his applicat ion for rehabilitation funds in the amount of $406,000. As a condition

precedent to retaining Simms' application on priority funding status, the planning department imposed

a December 17, 1988 deadline on Simms to present evidence of a private lender's commitment to

provide matching loan funds for the cooperative rehabilitation. Simms failed to do so.

          NCB apparently was t o be the source of the matching funds required by the city. In an

unexecuted commitment letter4 dated July 1, 1988, NCB offered to issue a commitment letter

   1
    A "due-on-sale" clause is a common provision in deeds of trust and mortgages. It gives a
lender the right to demand full payment of the balance due on the loan secured by the deed of
trust or mortgage if the borrower sells his interest in the property. In effect, it prohibits the
would-be buyer of the property from assuming the existing loan without prior approval of the
lender.
   2
       No cooperative housing existed in Texas at the time Simms was pursuing this plan.
   3
   NCB is an independent banking institution chartered by Congress to fund cooperative
housing.
   4
    A commitment letter conveys the terms and conditions under which a lender promises to
extend credit for a particular transaction. An unexecuted commitment letter represents a lender's
offer to provide financing. It is not binding on the lender until the would-be borrower accepts it
by signing the letter and returning it along with a commitment fee.
evidencing its promise to provide permanent financing for the co-op in the amount of $500,000.

Under the terms of the proposed commitment, NCB promised to provide financing if the co-op

satisfied, inter alia, the following conditions at least sixty days prior to the scheduled closing date of

the loan, July 15, 1989: (1) evidence of another lender's commitment of not less than $240,000, (2)

a first lien deed of trust on the apartment complex, and (3) proof of $372,000 in committed grant

funds from Houston. In another portion of the letter, NCB stated that it would consider a second lien

position on a loan equal to or shorter than the first lien loan term at a higher interest rate. Simms had

to accept NCB's commitment no later than August 15, 1988, by signing and returning the letter along

with a non-refundable commitment fee of one percent of the loan amount, or $5,000. Simms never

accepted NCB's offer.

                                                    C

        On July 19, 1988, Simms spoke to Brenda Tomlinson, an employee of GSA in Houston, about

his proposed cooperative conversion. He requested that GSA agree to waive the due-on-sale clause

in the deed of trust so that the proposed cooperative corporation could assume the existing loan.

GSA's waiver of the due-on-sale clause apparently would have satisfied NCB's condition that another

lender commit not less than $240,000 to the project. Tomlinson instructed Simms that because of

the scope of the request, a refinancing of the existing loan, i.e., the substitution of a new loan for the

existing loan, not a waiver of the due-on-sale clause, would be the appropriate course of action.

Simms wrote to Tomlinson in response to this conversation requesting a commitment letter for a new

loan of $232,000, at the market interest rate of 10.5%, to replace GSA's existing loan on the

apartment complex of $276,000 at 7.25%. Simms indicated in this letter that GSA would retain its

first lien on the apartment complex. In other words, Simms was not asking GSA to extend any

additional funds—GSA would receive $44,000 at closing, plus a higher interest rate on a lower loan

balance, and a continued first lien position on a renovated piece of collat eral. As a condition to

closing on the new loan, Simms proposed pre-sale of fifty of the fifty-eight apartment units in the

apart ment complex. He included with this letter a summary of the project indicating the city's

willingness to provide $400,000 in rehabilitation funds and NCB's willingness to provide permanent
financing in the amount of $500,000.

       On November 27, 1988, Simms again contacted Tomlinson concerning his proposal for a

commitment letter. Tomlinson told Simms that she was not authorized to review the proposal and

that she would forward it to Del Chastain, an asset manager in GSA's Dallas office.5 Tomlinson sent

Chastain a memorandum dated November 30 outlining in general terms Simms' proposal.

       Simms apparently called Chastain in early December and then sent him a package on

December 7 containing the November 2 letter from the city of Houston, the unexecuted and expired

NCB commitment letter, and the financial details of his cooperative conversion plan.6 Simms stated

at the close of the cover letter to the package:

       [T]he Gibraltar refinance would not occur until after the property is at least 80 percent sold
       (or leased with option to buy) to co-op buyers, and construction is completed and approved
       by city inspectors. At present, only a firm letter of commitment, contingent on the foregoing,
       is requested.

Simms indicated in this cover letter that GSA would retain its first lien position. He stated that he

had been in contact with the city concerning the looming December 17 deadline for supplying the

requested commitment letter. Simms stressed that the deadline was actually a "target, not a limit,"

and gave the name and number of a city official who could provide additional information about the

rehabilitation funds and the deadline. He also gave a contact name and number at NCB, although he

did not mention the fact that the deadline for accepting NCB's commitment letter had expired.

       Simms' package did not contain any information on cooperative housing, even though no

co-ops existed in Texas at that time. He did not explain that it was shares in the co-op itself that

would be sold to co-op buyers, but instead said in his cover letter to Chastain that the "property"

would be sold to co-op buyers. Even the unexecuted NCB co mmitment letter spoke in terms of

   5
    The record shows a dispute as to the cause of the four-month delay after Simms' initial
contact with Tomlinson. Simms claimed at trial that he thought Tomlinson was processing the
application during that time, asserting that she may have called him at some point. In Tomlinson's
memorandum to Chastain dated November 30, 1989, she wrote, "This project was placed on hold
after our initial discussion; however, on Monday Mr. Simms advised me they are now proceeding
fully and hope to close within 45 days." Simms denied at trial that he placed the application on
hold.
   6
    Simms was making regular and timely payments on the existing loan at the time of the
application and throughout the review period.
"presales of 50 of the 58 units."7

          In mid-December, Chastain apparently called Simms to discuss the conversion proposal.

Simms testified that they had a lengthy conversation, with Chastain asking a number of general

questions about the project. Neither Simms nor Chastain, however, could recall many of the details

of the conversation.

                                                    D

          In the meantime, GSA joined the lengthy list of failed savings and loans in Texas. As a result,

GSA is no more. On December 28, 1988, in an agreement with the Federal Savings and Loan

Insurance Corporation (the "FSLIC"), appellant-defendant First Gibraltar Bank ("First Gibraltar")8

purchased certain assets of GSA (and four other failed thrifts) from the FSLIC,9 including the loan

on the apartment complex. First Gibraltar did not assume the liabilities of GSA.10

          At some point in late December or early January, Chastain presented Simms' proposal to Rick

Carlton, his supervisor, and Zac Isaacs, legal counsel to the bank. On January 5, 1989, Chastain, who

continued in the employ of First Gibraltar, called Simms to inform him that First Gibraltar had

rejected his proposal. First Gibraltar never sent a written rejection of the proposal. Simms testified

that he was given no reason for this rejection other than that First Gibraltar "did not wish to

participate," though he did admit that they "talked in generalities" about the proposal. Chastain

apparently told Simms that Simms "would be wasting [his] time" to come to Dallas to talk about the

proposal. Chastain allegedly dissuaded Simms from talking to the president of First Gibraltar, Carl




   7
    Tomlinson was the only person to mention in writing the sale of shares. She stated in her
November 30 memorandum to Chastain, "This program would involve reorganizing ownership
into a non-profit corporation, and selling shares of the corporation to the tenant/owners."
   8
       First Gibraltar changed its name to First Madison Bank in February 1993.
   9
       GSA went into FSLIC receivership in late 1989.
   10
      The precise relevance of evidence relating to GSA's conduct in the processing of Simms'
application is somewhat problematic given the fact that First Gibraltar did not assume GSA's
liabilities.
Webb.11 Simms testified that he considered his proposal "dead" and thus did not take any other action

in the immediate aftermath of First Gibraltar's rejection. Simms did not approach any other lenders

about his proposal.

                                                    E

        The deterioration of the apartment complex accelerated over the ensuing months. A rainstorm

in October 1989 was the "coup de grace" according to Simms—leaking roofs made most of the units

uninhabitable. Simms again contacted First Gibraltar in Octo
                                                           ber. He wro te a series of letters to

Webb and had numerous telephone conversations with various First Gibraltar officials. He apparently

notified the bank that he could no longer make the payments on the loan and offered the bank a

quitclaim deed to the property. The bank allegedly insisted that Simms continue to manage the

property and look for a buyer. In October 1990, First Gibraltar accepted a no-strings $81,000 offer

from a third party for its deed of trust on the property, after rejecting an earlier offer of $90,000 that

required the bank to provide interim financing for another proposed upgrade.

                                                    II

                                                    A

        In November 1989, Simms filed complaints with the Office of Thrift Supervision and HUD

against First Gibraltar, alleging that racial animus motivated First Gibraltar's denial of his proposal.

After both agencies found no evidence of discrimination, Simms and two former apartment complex

residents filed suit in the United States District Court for the Southern District of Texas against First

Gibraltar, alleging, inter alia, violations of the Fair Housing Act (the "FHA"). The district court

dismissed the claims of the two former residents for lack of standing.

        Simms stipulated before trial that he was not attempting to prove that First Gibraltar violated




   11
      Simms asserted that Chastain refused to give the name and number of Webb, though he did
admit that Chastain told him that the president would simply refer Simms back to Chastain. Webb
testified that he normally did not become involved in the lending process. "We had many, many
lending relationships and I don't think that that is what the president of a banking organization
does."
the FHA under a "redlining" theory,12 though the racial composition of the area in which the

apartment complex was located—a critical part of a traditional "redlining" case—played a crucial role

in his argument. Instead, Simms' theory of the case was that First Gibraltar violated the FHA by

refusing to give him a commitment letter because it did not want to issue a new loan to a co-op that

probably would be minority-owned to replace the existing loan to him, a white landlord. He also

argued that First Gibraltar violated the FHA because of the discriminatory effects of its decision not

to issue a commitment letter.

                                                    B

        First Gibraltar presented no contemporaneous written record of its handling of the proposal

or its reasons for the rejection. The testimony of Chastain, the only First Gibraltar official directly

involved in the rejection of Simms' proposal who testified at trial, is thus crucial to our review

because it is the only direct evidence in the record of First Gibraltar's handling of the proposal and

its reasons for rejecting it.

        Chastain acknowledged that neither he nor First Gibraltar had any experience in cooperative

housing, and that he did not understand how co-ops worked. He also acknowledged that Simms'

proposal confused him. "[Q]uite a bit of the material that he supplied to me ... was not real clear and

we were never able to make some of the points clear as to what his proposal really was for."

        Although Chastain admitted that the bank would have had great interest in the proposal had

it retained its first lien position, he testified that the documentation that Simms submitted did not lead

him to believe that the bank's first lien would be secure. Chastain's doubts stemmed from two

sources. First, he allegedly believed that the sale of the apartment units—the fifty units that had to

be sold as a condition to closing on the refinancing—would diminish the collateral securing First

Gibraltar's loan on the apartment complex. In other words, he thought that only eight of the

   12
     "Redlining means "mortgage credit discrimination based on the characteristics of the
neighborhood surrounding the would-be borrower's dwelling.' " Cartwright v. American Savings
& Loan Association, 

, 913 n. 1 (7th Cir.1989) (quoting Thomas v. First Federal
Savings Bank of Indiana, 

, 1337 (N.D.Ind.1987)). The term derives from loan
officers evaluating home mortgage applications based on a residential map where integrated and
minority neighborhoods are marked off in red as poor risk areas. Robert G. Schwemm, Housing
Discrimination 13-42 (Release # 5, 1995).
fifty-eight units after the conversion to cooperative housing would secure First Gibraltar's loan.13 The

written documentation appeared to confuse even Simms' own expert witness, Champney Smith.14

Chastain also testified that he did not think that these eight remaining units would have been

rehabilitated,15 though Simms' counsel pointed to a provision in the NCB letter that effectively

guaranteed rehabilitation of the entire complex.16 Second, Chastain concluded from NCB's letter that

NCB required a first lien on the property. When Simms' counsel confronted Chastain with that

portion of the NCB letter stating that NCB would consider a second lien, Chastain merely responded

that he would have to re-read the entire letter.17 Chastain further testified that he was concerned that

a co-op of which First Gibraltar had no knowledge or record would be responsible for managing its

collateral. "[I]t would put the bank in a lesser position so far as the collateral was concerned...."

          Chastain claimed that the bank rejected the proposal also because it did not make "economic

   13
     Over First Gibraltar's strenuous objection, the district court would not allow First Gibraltar
to explore fully this particular reason because it was based on a "false premise." Chastain's
testimony does exhibit a misunderstanding about the organizational structure of a co-op. As
indicated earlier, however, the record shows there was no cooperative housing in Texas at the
time and neither GSA nor First Gibraltar had any experience with cooperative housing loans. The
record also shows that Simms failed to provide any explanation of co-ops in his application, and
affirmatively misstated that the "property" would be sold to co-op buyers. A co-op buyer in fact
purchases shares in the cooperative corporation and the right to lease a particular unit. The
cooperative corporation actually owns the property and finances its ownership of the property
with a blanket mortgage secured by the property. The sale of interests in the co-op does not
diminish a lender's underlying security interest in the property.
   14
     After examining selected portions of the proposal at the request of Simms' counsel, Smith
stated:

                   I would want to see a spreadsheet showing the partial-release clause and the cash
                   flow as to the remaining collateral after each sale. But with that caveat, I would
                   have no problem going forward with it.
   15
        He testified:

                   We would have whatever the remaining number of apartment units left that would
                   not be complete, that would not be completed, there was no provisions in anything
                   that those would be completed and we would be left holding the bag with
                   whatever that remaining 20 percent was and looking to a co-op to complete it.
   16
     The provision required that the co-op place in escrow 150 percent of the estimated cost of
unfinished repairs at the time of closing.
   17
     Both Chastain's supervisor and Zac Isaacs supposedly agreed at the time of the rejection that
the proposal did not protect First Gibraltar's first lien position.
sense" at the time. He gave a number of reasons for this conclusion. First, he stressed that both the

city's and NCB's commitments remained unfulfilled.18 He noted that the NCB letter was unsigned and

that the time limit in the city's letter had expired. "They were undocumented as far as I am

concerned." Smith, Simms' expert witness, agreed that a prudent lender would request an executed

or "bankable" commitment letter, and admitted that it would not be imprudent to deny a proposal

based o n an unexecuted, expired commitment letter. But he also asserted that it would not make

sense for Simms to pay the $5,000 commitment fee to obtain a "bankable" commitment letter from

NCB if Simms were unsure whether First Gibraltar would participate in the conversion plan.

        Although Simms told Chastain that he could call NCB and the city about their offers, Chastain

repeatedly stressed during his testimony that he did not have the resources to do the legwork for a

customer on a proposal; furthermore, there was no evidence that it was customary to do so. "I was

relying on the customer like all other workouts to provide me with the necessary information to make

an intelligent decision on it. This information was not supplied to me. I told Mr. Simms it was not

there. I never did receive anything else." Chastain claimed that he asked Simms for up-to-date

information about the commitment letters, but Simms denied ever being asked for such information

and asserted that he would have been willing to provide such information if Chastain had requested

it. Smith, Simms' expert witness, asserted that it was the borrower's responsibility to provide

information about a deal; he admitted that a lender does not have an obligation to obtain information

if it asks the borrower for such information and the borrower does not supply it.

        The second reason why the proposal did not make "economic sense," according to Chastain,

was that there appeared to be a shortfall in financing for the rehabilitation of the apartment complex.19

Third, Chastain claimed that he was concerned about the proposal because of the length of time—five

   18
     Simms testified that Chastain never told him that First Gibraltar rejected the proposal because
the formal requirements of the commitment letters were unsatisfied.
   19
     The financial details that Simms submitted to Chastain in early December showed that he
needed $637,000 to rehabilitate the property. Chastain claimed that there was a shortfall of over
$200,000 because the city rehabilitation grant was only for $406,000. He apparently did not
understand that NCB's permanent financing was to be the source of the additional rehabilitation
funds, although Chastain had, of course, no guarantee that NCB would supply the permanent
financing because NCB's commitment letter remained unexecuted and had expired.
years—it took for Simms to obtain funding for the rehabilitation, though he later admitted that he did

not know whether that was a normal or abnormal period to get approval for a housing grant. Fourth,

he pointed to the lack of experience with cooperative housing in the area.

          Simms' counsel attempted to elicit from Chastain his reason for not issuing a commitment

letter that made the refinancing contingent on resolution of First Gibraltar's concerns about the

proposal. Although Chastain admitted that he could have issued such a commitment letter, he

declared that he did not do so because "the workout was not a good workout or good proposal with

the information that had been supplied." Smith, Simms' expert witness, testified that a lender might

issue a commitment letter with a condition that overcame an objection to a proposal, but admitted

that if a lender had a number of concerns, negotiations were more appropriate. Smith also admitted

that he would not issue a commitment letter if a deal did not make "economic sense."

          Simms' counsel tried to impeach Chastain's testimony by asking him about an affidavit

Chastain made in late 1989 during the HUD investigation into the rejection.20 After showing the

affidavit to Chastain, Simms' counsel questioned Chastain about various reasons appearing in the

affidavit. First, he asked Chastain why he had stated that the deteriorated condition of the property

was a reason for the rejection when Chastain had acknowledged that disrepair was not a good reason

to deny a proposal to improve property.21 Second, he asked Chastain why he had claimed in the

affidavit that it would have cost more than the entire loan basis t o remove the asbestos in the

apartment complex. Chastain admitted earlier in his testimony that he just assumed that asbestos was

present based on the age of the apartment complex, even though he did not know the exact age of

the property, and admitted "[t]here has been nothing confirmed" on the need for spending any money

on an asbestos rehabilitation. Finally, Simms' counsel asked Chastain why he had declared that

Simms' failure to keep up the property was a reason for the rejection when neither he nor any other

employee of First Gibraltar had inspected the apartment complex.


   20
        The affidavit was not admitted into evidence.
   21
        Chastain admitted that he did not have first-hand knowledge of the condition of the property.
        Simms' counsel also attempted to show that Chastain did not process Simms' application in

a customary manner. Simms' counsel first questioned Chastain about the procedure for processing

workout proposals. Chastain testified that he first analyzed the proposal, which had to contain a list

of the repairs and estimated costs. He then would inspect, or send a field inspector to inspect, the

property to determine whether the proposed repairs were necessary and justifiable. Finally, he would

present the proposal to his supervisor for a decision.22 When asked why he did not make an

inspection of the property, Chastain testified that "we didn't progress that far along on it. There was

not enough information there to warrant us getting that involved in it."23

        Neither side presented evidence of any other workout proposal submitted to First Gibraltar

around the time of, or even after, First Gibraltar's rejection of Simms' proposal. Although Chastain

mentioned that the bank was engaged actively in workouts24 of existing loans in November

1989—some ten months after the rejection of Simms' proposal—the record does not reveal the level

of activity in the early months of 1989; First Gibraltar apparently made only one new loan in 1989.25

                                                   C

        At the close of the evidence, the district court instructed the jury on discriminatory treatment

and discriminatory effects (or disparate impact) theories of liability under sections 804(b) and 805 of

the Fair Housing Act, 42 U.S.C. §§ 3604(b), 3605, and submitted interrogatories to the jury

ostensibly based on each theory. The jury found First Gibraltar liable under both theories and

awarded $1.21 million in compensatory damages and $2 million in punitive damages. On April 18,


   22
      First Gibraltar apparently did not have a formal loan review committee when it rejected
Simms' proposal because the newly-chartered bank was not making any new loans. Chastain
testified, however, that there was an informal "committee" or process for reviewing workout
proposals on existing loans. He indicated that he would present them to his supervisor, and they
would decide whether to approve them.
   23
    Chastain did testify, though, that he had enough information to submit Simms' proposal for
consideration.
   24
    Chastain explained that the typical workout proposal involved a request for additional funds
to make repairs to a distressed property in order to make it marketable.
   25
   There are no details on this loan in the record other than the borrower's name and the
amount.
1994, the district court set aside its earlier order dismissing the former residents' claims and severed

these claims from those of Simms. First Gibraltar appeals from the final judgment and from the

district court's April 18 order.26

                                                  III

          The crucial question presented is whether the record contains sufficient evidence to support

the jury's verdict that First Gibraltar violated sections 804(b) and 805 of the Fair Housing Act, 42

U.S.C. §§ 3604(b), 3605. Section 3604(b) provides that it is unlawful "[t]o discriminate against any

person in the terms, co nditions, or privileges of sale or rental of a dwelling, or in the provision of

services or facilities in connection therewith, because of race." 42 U.S.C. § 3604(b) (1994). Section

3605 provides that it is unlawful for any "entity whose business includes engaging in residential real

estate-related transactions to discriminate against any person in making available such a transaction

... because of race." 42 U.S.C. § 3605(a) (1994). "Residential real estate-related transactions"

include "the making ... of loans or providing other financial assistance—for purchasing, constructing,

improving, repairing, or maintaining a dwelling; or secured by residential real estate." 42 U.S.C. §

3605(b)(1). Simms sought recovery under both discriminatory treatment and discriminatory effects

theories of liability. He relied on both of these theories to support claims under both § 3604 and §

3605.27

   26
     Simms filed a motion to strike that portion of First Gibraltar's appeal concerning the district
court's April 18 order. This court carried Simms' motion with the case in an order dated July 22,
1994. First Gibraltar has abandoned any issue or argument in this appeal concerning the district
court's April 18 order because it did not argue any error with respect to this order in its briefs
before this court. See Fed.R.App.P. 28(a)(5) ("The argument must contain the contentions of the
appellant on the issues presented, and the reasons therefor"); Yohey v. Collins, 

, 225
(5th Cir.1993) (holding that appellant abandoned argument by failing to argue it in body of brief).
We therefore dismiss Simms' motion to strike as moot.
   27
     First Gibraltar contends that because Simms' complaint concerned only the availability of
financing under § 3605, and not the availability of housing under § 3604(b), § 3605 is the only
relevant provision. Simms argues that he was entitled to pursue the § 3604(b) claim because his
tenants were denied the opportunity to purchase a dwelling. Simms' argument raises a standing
question that appears to have been addressed neither by the parties nor by the district court. See
Village of Arlington Heights v. Metropolitan Housing Development Corporation, 

,
263-64 & n. 9, 

, 562 & n. 9, 

(1977) (refusing to address standing of
a corporation to assert rights of its prospective minority tenants because of presence of one
individual plaintiff who demonstrated standing). Even if we were to determine that Simms had
standing to bring a § 3604(b) claim, the plain language of the two provisions seems to indicate
        Simms argued at trial that First Gibraltar refused to issue him a commitment letter promising

to replace its existing loan to him, a white landlord,28 with a new loan to the proposed co-op that

probably would have been minority-owned because of the racial composition of the current tenants

of the apartment complex and its location in a predominantly minority area.29 We address initially that

portion of the jury's verdict finding that First Gibraltar violated the FHA based on a showing of

discriminatory effects.

                                                  A


that § 3605 is the vehicle for discrimination claims involving the financing of residential housing.
See Mackey v. Nationwide Insurance Companies, 

, 423 (4th Cir.1984) ("If § 804
was designed to reach every discriminatory act that might conceivably affect the availability of
housing, § 805's specific prohibition of discrimination in the provision of financing would have
been superfluous"); but see Laufman v. Oakley Building & Loan Co., 

, 493
(S.D.Ohio 1976) ("[A] denial of financial assistance in connection with a sale of a home would
effectively "make unavailable or deny' a "dwelling' " in violation of § 3604(b)). Because of the
result we reach today, it is unnecessary for us to address these matters.
   28
     First Gibraltar concedes that Simms has standing to bring an action in his own behalf under §
3605 of the FHA. The FHA states, "An aggrieved person may commence a civil action in an
appropriate United States district...." 42 U.S.C. § 3613 (1994). It defines an "aggrieved person"
as "any person who claims to have been injured by a discriminatory housing practice." 42 U.S.C.
§ 3602(i)(1). A "discriminatory housing practice" is "an act that is unlawful under section 3604,
3605, 3606, or 3617 of this title." 42 U.S.C. § 3602(f). See Old West End Association v.
Buckeye Federal Savings & Loan, 

, 1102 (N.D.Ohio 1987) (white homeowners
have standing to maintain discrimination actions for injuries suffered by them as a result of racially
discriminatory housing practices).
   29
     Although Simms argued in his briefs and at oral argument that the denial of his conversion
proposal on January 5, 1989, was but one of a series of discriminatory acts at issue in this case
extending from December 1988 through October 1990, "when First Gibraltar maliciously filed a
bad credit report against Simms," the record makes clear that the only triable issue in the case
was, and is, whether First Gibraltar's denial on January 5 violated the FHA. Indeed, when First
Gibraltar was putting on its defense, the district court prohibited First Gibraltar from questioning
Scott Gesell, First Gibraltar's compliance officer, about allegations in Simms' case-in-chief
concerning the credit report by stating, "[W]hat does it have to do with the fact Mr. Simms
presented a proposal a year and a half, two years earlier and was turned down. This case is about
the proposal.... Whether or not he was justified in [filing the credit report] is not an issue in this
case. Will not be an issue presented to the jury." Neither party disputed this ruling. The district
court admitted evidence of the incidents after January 5, upon which Simms now expounds as
having some independent relevance, solely for the purpose of showing the effects of the denial on
January 5. Furthermore, the jury instructions indicate that it was the rejection of the proposal on
January 5 that was at issue in the case. For example, the instructions state that Simms "asserts
that First Gibraltar violated federal law when they [sic] failed and refused to review and/or failed
to give the usual and customary review to his proposal." The instructions also state that "[y]ou
may find that a discriminatory housing practice on the part of First Gibraltar existed if you find
from a preponderance of the evidence that Simms' request for loan modification was handled in a
[different] manner."
        First Gibraltar argues that Simms did not present sufficient evidence to support a finding that

the bank violated the FHA based on a showing of discriminatory effects. It also argues that the

district court improperly instructed the jury on the standard for finding a violation of the FHA under

a discriminatory effects theory. First Gibraltar in essence contends that this record simply does not

present a discriminatory effects case. Simms, on the other hand, argues that he proved discriminatory

effects by showing that First Gibraltar's rejection primarily affected minorities. First, virtually all of

the prospective owners of the planned cooperative units would have been minorities. Second, the

cooperative project would have benefited the predominantly minority community in which it would

have been located.

        We agree that a violation of the FHA may be established not only by proof of discriminatory

intent, but also by a showing of significant discriminatory effect. Hanson v. Veterans Administration,

, 1386 (5th Cir.1986). The relevant question in a discriminatory effects claim against

a private defendant, however, is not whether a single act or decision by that defendant has a

significantly greater impact on members of a protected class, but instead the question is whether a

policy, procedure, or practice specifically identified by the plaintiff has a significantly greater

discriminatory impact on members of a protected class. See Anderson v. Douglas & Lomason Co.,

Inc., 

, 1284 (5th Cir.1994) (Title VII), cert. denied, --- U.S. ----, 

, 

(1995). In this case, Simms does not identify an alleged discriminatory policy,

procedure, or practice of First Gibraltar, much less provide evidence, statistical or otherwise, that

such policy, procedure, or practice had a significantly greater impact on members of a protected class.

        We therefore conclude that Simms did not present sufficient evidence to establish a violation

of the FHA under a discriminatory effects theory of liability. We next turn to examine that portion

of the jury's verdict finding that First Gibraltar violated the FHA based on a showing of discriminatory

treatment.

                                                    B

         First Gibraltar contends that the evidence is insufficient to support the jury's finding of

discriminatory treatment in violation of the FHA. We agree.
                                                   (1)

        We recently held in the Age Discrimination in Employment Act ("ADEA") context that

        [t]o sustain a finding of discrimination, circumstantial evidence must be such as to allow a
        rational factfinder to make a reasonable inference that age was a determinative reason for the
        employment decision.... [A] jury issue will be presented and a plaintiff can avoid summary
        judgment and judgment as a matter of law if the evidence taken as a whole (1) creates a fact
        issue as to whether each of the employer's stated reasons was what actually motivated the
        employer and (2) creates a reasonable inference that age was a determinative factor in the
        actions of which plaintiff complains.

Rhodes v. Guiberson Oil Tools, 

, 994 (5th Cir.1996) (en banc) (emphasis added). The

holding in Rhodes may be appropriately applied to this FHA case in which the question is whether

the plaintiff presented sufficient evidence for the jury to make a reasonable inference that race

motivated First Gibraltar's rejection of Simms' proposal. We thus will sustain the jury verdict if the

evidence taken as a whole, when viewed in the light most favorable to the verdict, Jones v. Wal-Mart

Stores, Inc., 

, 987 (5th Cir.1989), (1) creates a fact issue as to whether each of First

Gibraltar's stated reasons for refusal actually motivated First Gibraltar and (2) creates a reasonable

inference that race was a significant30 factor in the refusal.

        It is not enough merely to create a fact issue as to each of First Gibraltar's reasons for refusing

to issue a commitment letter. See St. Mary's Honor Center v. Hicks, 

, 524-25, 

, 2756, 

(1993) ("Title VII does not award damages against employers

who cannot prove a nondiscriminatory reason for adverse employment action, but only against

employers who are proven to have taken adverse employment action by reason of ... race"). The

evidence taken as a whole must also create a reasonable inference that race was a significant factor

in the refusal. See Polanco v. City of Austin, Texas, 

, 977-78 (5th Cir.1996) (making

same observation in Title VII context). First Gibraltar's refusal may have been unsound, unfair, or

   30
     The protected trait must only be "one significant factor" in the challenged decision to violate
the FHA. Woods-Drake v. Lundy, 

, 1202 (5th Cir.1982). Our decision in Hanson
explained that "it is enough to show that race was a consideration and played some role in a real
estate 

(citation omitted). The ADEA, on the other hand, requires
that age be a "determinative factor" in the challenged decision. 

; see
Hazen Paper Company v. Biggins, 

, 610-11, 

, 1706, 

(1993) ("[A] disparate treatment claim cannot succeed unless the employee's protected trait
actually played a role in that process and had a determinative influence on the outcome"). We
find it unnecessary to explore the difference between these two causal formulations.
even unlawful, yet not have been violative of the FHA if there is no evidence from which a jury

reasonably could infer that race was a significant factor in First Gibraltar's decision. See Hazen

, 113 S.Ct. at 1707 (making similar observations in ADEA context);

(same).

                                                    (2)

        We now turn to the record in this case. Simms argues that the evidence establishing a prima

facie case of discrimination and discrediting each of First Gibraltar's proffered reasons for refusal,

along with evidence of what he characterizes as First Gibraltar's "arbitrary and unreasonable" conduct,

is sufficient for a reasonable jury to infer that race was a significant factor in First Gibraltar's refusal

to issue a commitment letter.

        In the light most favorable to the verdict, the evidence establishes that Simms sought a

commitment letter for the refinancing of an existing loan on property located in a predominantly

minority area. It also establishes that Simms applied for a commitment letter, that the proposal

qualified for a commitment letter, and that First Gibraltar refused to issue the commitment letter

despite the merits of the proposal. Simms, however, proffered no evidence of First Gibraltar's lending

activity around the time of, or even in the months immediately after, the rejection of his proposal.

He did introduce evidence, albeit conclusory and brief,31 that indicated that First Gibraltar was

"actively engaged" in rehabilitation and workout modifications and funding in November 1989, ten

months after the rejection of Simms' proposal. This evidence did not indicate whether the

rehabilitation and workout modifications and funding were of a type similar to Simms' proposed

refinancing. In fact, all details of these transactions are notably absent from the record, including the

number of such transactions, the areas in which this lending activity occurred, and the race of the

borrowers involved.

        Our review of the record persuades us nevertheless that there was at least a fact issue as to

whether First Gibraltar's articulated reasons for the rejection—that First Gibraltar's first lien position


   31
   Simms merely asked Chastain whether First Gibraltar was involved in "lots of workouts" in
November 1989; he received an affirmative response.
would be jeopardized and that the proposal did not make "economic sense," i.e., Houston's and

NCB's commitment letters remained unfulfilled, an alleged shortfall in financing, the length of time

it took to put the deal together, and the lack of experience with cooperative housing in the

area—were the real reasons for the rejection. First, First Gibraltar gave no specific reasons at the

time of the rejection. Second, a reasonable jury could have discounted Chastain's concern that First

Gibraltar's first lien position was in doubt. The sale of individual cooperative units would not have

diminished First Gibraltar's collateral. Also, NCB did not require First Gibraltar to give up its first

lien on the apartment complex as a condition to NCB extending permanent financing to the co-op;

the NCB letter clearly indicates that NCB would consider a second lien at a higher interest rate.

Third, a reasonable jury also could have discounted Chastain's contention that the proposal did not

make economic sense inasmuch as Simms' proposal would have reduced First Gibraltar's exposure

on the apartment complex and increased the interest rate on the remaining loan balance. Finally,

Simms' efforts to impeach Chastain with Chastain's earlier affidavit to HUD could have led a

reasonable jury to question other portions of Chastain's testimony.32

        Simms also adduced the following evidence at trial, evidence of what he characterizes as First

Gibraltar's "arbitrary and unreasonable" conduct: First Gibraltar did not give Simms written reasons

for the rejection; Chastain dissuaded Simms from meeting with him or contacting the president of

First Gibraltar after the January 5 reject ion; Chastain did not actively solicit remedial action by

Simms to save the proposal after the rejection; First Gibraltar did not inspect the property before

rejecting the proposal; and Chastain submitted an incomplete application to his superior for

consideration.

                                                 (3)

        Even though Simms' evidence satisfied Rhodes' first requirement by creating a fact issue as

to whether each of First Gibraltar's stated reasons for refusal actually motivated First Gibraltar, the

evidence Simms offered is insufficient to satisfy Rhodes' second requirement. A thorough review of

   32
     Simms claims on appeal that the inconsistencies between Chastain's testimony and his earlier
affidavit to HUD are evidence of discrimination because they amounted to "false representations
to thwart efforts of Simms to obtain relief under the Fair Housing Act from HUD."
the record makes plain that a reasonable jury could not infer from the evidence as a whole that race

was a significant factor in First Gibraltar's refusal to issue a commitment letter.33

        Indeed, when the evidence is viewed in its full context, it is not compelling that Simms'

application was treated in a highly unusual manner. First, there is no evidence that First Gibraltar was

engaged in any workout or rehabilitation activity around the time of the rejection—Simms' evidence

only establishes that First Gibraltar was engaged in some undefined workout activity in November

1989, ten months after the rejection. This lack of evidence particularly weakens Simms' argument

in the light of the fact that First Gibraltar had just come into existence through the purchase of the

assets of GSA and four other lending institutions eight days before Simms' rejection, and was, thus,

in a transitional period. Second, First Gibraltar had never financed a cooperative housing project, and

no cooperative housing existed in Texas, at the time of the rejection. Third, Simms' proposal was not

properly documented. For example, Simms included the unexecuted and expired NCB commitment

letter—unexecuted because Simms did not want to pay the commitment fee—without any explanation

in his cover letter, even though the cover letter discussed the looming deadline for the city's

commitment. His application also contained no explanation of cooperative housing, and, in fact, the

cover memorandum to Chastain dated December 7 affirmatively misrepresented what co-op buyers

purchase by declaring that closing would occur after "the property is at least 80 percent sold."

        Simms' evidence of First Gibraltar's "arbitrary and unreasonable" conduct is also insufficient

for a reasonable jury to infer that race was a significant factor in the rejection. The fundamental flaw

in this evidence is that Simms offered it in a vacuum; he presented absolutely no evidence that other,

"non-protected" applicant s or applications were treated any differently around the time of Simms'

rejection. See McDonnell Douglas v. Green, 

, 804, 

, 1825, 

(1973) (ruling that retention or rehiring of white employees engaged in similar acts of misconduct

would be especially relevant to showing of pretext). Simms also did not present any evidence from


   33
     Unlike the defendants in Hicks and Rhodes, First Gibraltar strenuously denies that the record
contains sufficient evidence for a reasonable jury to conclude that Simms established a prima facie
case of lending discrimination. See 

, 113 S.Ct. at 2747; Rhodes v.
Guiberson Oil Tools, 

, 547 (5th Cir.1994) (dissenting opinion) (reversed en banc).
which it might be inferred that First Gibraltar had a poor record of lending in minority areas or to

minorities;34 furthermore, there was not the slightest evidence of racial bias presented on the part of

any of First Gibraltar's personnel. Although Simms' expert, Smith, testified that it was industry

custom to provide written notification of a rejection, and the district court ruled that First Gibraltar

was required to give written notification of the rejection under Regulation B of the Equal Credit

Opportunity Act,35 failure to provide written notification to Simms is insufficient to infer a racial

motive on the part of First Gibraltar without some showing that other, "non-protected" applications

were treated differently. In other words, failing to follow industry custom or federal regulations is

not evidence from which a jury could infer racial animus unless Simms showed that First Gibraltar

normally conformed with industry custom or complied with federal regulations in handling similar,

"non-protected" applications. The same is true for Chastain's efforts to dissuade Simms from meeting

with Chastain or talking with the president after the rejection, and Chastain's failure to actively solicit

Simms to remedy what Chastain saw as the proposal's flaws.

        Evidence of First Gibraltar's failure to inspect the property is similarly flawed. Simms merely

elicited generalized testimony from Chastain about customary procedures for handling workout

proposals from other bank customers requesting additional money to make needed repairs to existing

property. Simms' proposal actually did not fall into that category, however, because he was seeking

a refinancing of an existing loan from First Gibraltar that would actually reduce their exposure on the

apartment complex, not additional money for repairs. Thus, the fact that First Gibraltar did not

inspect the property to determine whether the requested repairs were actually needed, a customary

step in reviewing a workout proposal, does not permit an inference of intentional discrimination in

this case. The same is true for the submission of the incomplete application to Chastain's superior.


   34
     Scott Gesell, First Gibraltar's compliance officer, testified that First Gibraltar made a total of
eight loans in the census tract encompassing the apartment complex in 1989. He indicated that six
were home improvement loans; all he knew about the other two was that they were secured by
real property.
   35
     We need not reach the issue whether the district court erred as a matter of law when it
concluded that First Gibraltar's failure to give written notice of its rejection constituted a violation
of the Equal Credit Opportunity Act.
        The ultimate burden of persuasion that race was an intentional and significant factor in

rejecting Simms' proposal was squarely on Simms. 

, 113 S.Ct. at 2747.

Given that the burden of proof was on Simms—and not on First Gibraltar to disprove the existence

of race as a significant factor in the decision—we simply cannot conclude that a reasonable jury could

infer from the evidence as a whole that race was a significant factor in First Gibraltar's refusal to issue

a commitment letter.

                                                    IV

        We thus sum up: The FHA does not create a cause of action for bungling a deal, failing to

follow industry custom, violating the Equal Credit Opportunity Act, or even making false

representations to a government agency. See Hazen 

, 113 S.Ct. at 1707

(making similar observations in ADEA context); 

, 113 S.Ct. at 2754 ("Title

VII is not a cause of action for perjury"). The FHA instead prohibits a lending institution from using

race, or any other prohibited factor, as a basis for making a lending decision. Our holding today is

therefore relatively narrow and simple: evidence of a bank's refusal to issue to a white landlord a

commitment letter to refinance an existing loan in a predominantly minority area with a loan to a

co-op that probably would be minority owned, along with evidence discrediting the bank's articulated

reasons for refusing to issue the letter, and evidence of less than thorough handling that does not

conform generally to customary industry practices, will not support an inference of intentional

discrimination without some evidence that similar "non-protected" applications have received

dissimilar treatment.

        For the foregoing reasons, we REVERSE the judgment of the district court and REMAND

for entry of judgment in favor of First Gibraltar.36

        REVERSED and REMANDED.37

   36
    Because we dismiss for lack of evidence, we do not reach the other issues raised by First
Gibraltar on appeal.
   37
     We DENY Simms' motion under Rule 38 of the Federal Rules of Appellate Procedure to
recover costs and damages. We also DISMISS as moot Simms' motion to disregard
misrepresentations of fact and law in First Gibraltar's reply brief and assertions of error in its reply
brief not asserted in its original brief.
EMILIO M. GARZA, Circuit Judge, concurs as to the judgment only.