Bank Will Pay $1.4 Million to Settle Lawsuit Over Slum Housing Buildings: Highland Federal will disburse funds to tenants, the city and lawyers. Firm says it has a good record of supporting low-income housing.: [Home Edition]

A bank accused of helping to run a Los Angeles slum ring that exposed hundreds of low-income renters to dismal living conditions will pay $1.4 million to tenants, the city and public interest attorneys, officials announced Friday.

The move ends a complex lawsuit first filed against Highland Federal Bank and 135 other defendants in 1989 and raises the total settlement in the case to $3.26 million, a record for a slum housing lawsuit brought by the city. In all, 11 buildings in Westlake, Echo Park, Hollywood, South-Central, Koreatown and Pico-Union were involved, including seven that had some financing from Highland Federal.

Authorities alleged that the bank, based in Highland Park, knowingly helped finance frequent transfers of ownerships to people who had no means and no intention of maintaining the buildings, many of which were infested with vermin and had broken windows and other hazards, such as dangerous wiring. At one point, a Labrador dog was listed as the president of a shell corporation that owned the Cameo Hotel, a Westlake building with a $200,000 loan from the bank, the city attorney's office maintained.

Los Angeles City Atty. James K. Hahn told a...