The City of Los Angeles suffered a legal setback when a three-judge panel of the U.S. 9th Circuit Court of Appeals ruled that the city failed to make a case against alleged mortgage lending discrimination by Bank of America and Wells Fargo.
According to a Los Angeles Times report
, the court found that Los Angeles failed to prove its allegation that the banks engaged in predatory lending practices against non-White borrowers in the years leading up to the housing bubble meltdown. While the city argued that both banks offered generous incentives to loan officers for encouraging borrowers to take out larger home loans, the judges stated that the city failed to prove those incentives specifically targeted non-White borrowers, adding that the employee incentives and the marketing materials used to promote these loans “would affect borrowers equally regardless of race.”
Tom Goyda, a spokesman for Wells Fargo, praised the Circuit Court’s ruling “to uphold the district court’s thoughtful ruling and confirm the dismissal of the Los Angeles city attorney’s mortgage case against Wells Fargo.” Bank of America spokesman Lawrence Grayson added, “We are pleased that the court found that the city failed to articulate a viable legal claim and affirmed the dismissal of the lawsuit.” Rob Wilcox, a spokesperson for Los Angeles City Attorney Mike Feuer, said the city is reviewing the 9th Circuit’s ruling and will determine how to proceed.