By Cristian Farias
The Supreme Court ruled on Monday (click here) that the city of Miami can sue Bank of America and Wells Fargo under federal housing law for allegedly engaging in discriminatory lending practices toward minority borrowers. But in the same ruling, it set a high bar for cities claiming that they too were victims, down the road, of that discrimination.
In its lawsuit, filed in 2013, Miami contended that the two banks’ targeting of prospective black and Latino homeowners for riskier, less favorable mortgage loans ultimately drove a wave of defaults, foreclosures and a fall in property values in the city. As a result, Miami argued, it was left with less tax revenue and a rash of blighted homes that forced it to funnel more municipal resources into the affected communities.
The Supreme Court held in a 5-to-3 decision that Miami counts as an “aggrieved person”under the Fair Housing Act and therefore may use the law to pursue its claims against the banks.
So, now, cities are people, too.
“Here, we conclude that the City’s claims of financial injury in their amended complaints — specifically, lost tax revenue and extra municipal expenses — satisfy the ‘cause-of-action’ ... requirement” in the law, wrote Justice Stephen Breyer....
