Miami Predatory Lending Suit to be Considered by SCOTUS

Miami Predatory Lending Suit to be Considered by SCOTUS

On June 28, 2016, the Supreme Court of the United States (SCOTUS) agreed to hear appeals (Reuters, June 28, 2016) from Bank of America and Wells Fargo regarding lawsuits brought by the City of Miami in which the two large mortgage lenders were accused of discriminatory lending practices. Rather than ruling on the merits of the case, the Justices will be considering whether municipalities have standing to bring such suits against mortgage lenders.

In its suit, Miami accused (SCOTUSBLOG) the two banks of steering minority customers into higher-cost mortgages , which, in turn, led many of these customers into foreclosure. In addition to its argument that the banks inflicted harm on vulnerable city residents, Miami argues that the lending practices used by these banks represented a direct cost to Miami in lost property tax revenue and other community costs associated with foreclosures.

This decision may have far-reaching implications. Several other cities – such as Los Angeles (L.A. Times), Chicago (Reuters) and Baltimore (The Baltimore Sun) – have attempted similar lawsuits with limited success. A SCOTUS decision in favor of Miami will strengthen the standing of municipal plaintiffs for similar cases against mortgage lenders.

June 30th, 2016|