Appeal to court alleges Wells Fargo discriminated against Black borrowers in Miami Gardens

Miami Gardens has filed an appeal in a case, in which the city alleged Wells Fargo used discriminatory lending practices against its residents.

Wells Fargo dodged a Fair Housing Act lawsuit from Miami Gardens back in June 2014 when a federal judge ruled the city had insufficient evidence to support claims of discriminatory lending. The suit alleged the San Francisco-based bank charged higher mortgage rates to Black and Hispanic borrowers compared to their white counterparts who were similarly situated. Miami Gardens claimed that in turn, this led to decreased property values and caused a wave of foreclosures during the 2008 housing crisis. Now the third largest Black-populated city in the country is reviving the fight after filing a notice of appeal with the U.S Court of Appeals for the 11th Circuit.

“This city is appealing the case because we believe that the court got it wrong and failed to follow clearly established precedent,” said Miami Gardens City Attorney Sonja Dickens.

Wells Fargo spokeswoman Michelle Palomino said the bank is prepared for the city’s appeal after its 2014 victory.

“We were pleased with the court’s decision in June to grant our motion for summary judgment and dismiss the city of Miami Gardens’ case against Wells Fargo,” said Palomino. “And, [we] will be prepared to respond to the city’s appeal. We will continue our focus on helping to expand homeownership opportunities in Florida and across the country.”

Wells Fargo was not the only major bank on the city’s radar as the 2014 lawsuit also targeted JPMorgan, Chase, Citigroup and Bank of America for discriminatory behavior – all of which were dismissed.

Sixty-five percent of the population in Miami Gardens are homeowners, and the city has been working to increase those numbers. In April 2012, Miami Gardens purchased a property for $54,370 – ironically enough, from Wells Fargo. The purchase was a part of the Neighborhood Stabilization Program, a federal resource that aims to provide shelter using revitalized homes. Miami Gardens was awarded $6.8 million.

Miami Mayor Francis Suarez, also a lawyer who has fought and won similar cases, said fighting discrimination lawsuits could be a tough battle.

“It is very difficult to win in these cases because the banks have very high-powered lawyers and spend a lot of money on litigation,” said Suarez. “These are cases that if [the bank] loses, it can cost them hundreds of millions of dollars, so they put a lot of resources into them.”

The mayor went on to say that a win in this case would send a pivotal message to large corporations. “I think a win would be incredible, not only for the African-American and Hispanic communities but also for the cities themselves to push back when large institutions are discriminating against their residents,” said Suarez.

Wells Fargo is no stranger to this kind of controversy. In 2012, the big bank paid more than $175 million to settle similar discrimination allegations brought by the Justice Department. As a part of that deal, in which the bank did not admit wrongdoing, Wells Fargo settled comparable lawsuits filed by the state of Illinois and the city of Baltimore. Back in February 2018, the city of Sacramento accused Wells Fargo of illegal lending in minority and low-income communities where they also claim it reduced home values, limited property tax revenue and drove up foreclosures.

“If the city wins, it would mean that the banks involved will be held accountable for discriminatory lending practices,” said Dickens. “Specifically, they will be held accountable for targeting minority homeowners and lending to them on terms that are less favorable than others.”

No date has been set for both parties to present their arguments.

-from Miami Times