Supreme Court: Cities Can Sue Lenders on Predatory Lending

May 01, 2017

The U.S. Supreme Court issued a 5-3 ruling that said cities can sue financial institutions for predatory lending practices aimed at non-white borrowers that result in foreclosures, declines in property taxes and dips in property values.

According to a Reuters report, the high court’s decision affirms the approach taken by Miami and other cities that attempted to use the Fair Housing Act to hold banks accountable for lending practices that resulted in the increase of foreclosures during the last decade. Three conservative members of the court—Clarence Thomas, Samuel Alito and Anthony Kennedy—dissented from this ruling.

However, the court gave an 8-0 ruling that threw out an appellate ruling in Miami’s favor and asked the lower court to revisit the city’s lawsuit against Wells Fargo and Bank of America to determine whether there was a direct link between the banks’ lending practices and the city’s losses. Newly appointed Justice Neil Gorsuch abstained from participating in both rulings.

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Phil Hall

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May 01, 2017

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