In December of 2013, the City of Miami sued Bank of America, CitiGroup, and Wells Fargo in federal court, alleging that the banks violated the Fair Housing Act by specifically going after minorities with undesirable home loans. This practice, the lawsuits alleged, resulted in harm to the City in the forms of lost tax revenue and increased municipal costs in dealing with the problems associated with large numbers of foreclosed, sometimes-illegally occupied, largely neglected properties. At the time, the City of Miami had this to say: “While these banks were generating substantial revenue from the issuance of predatory mortgages, the City of Miami was losing significant revenue and incurring costs that have not been reimbursed.” These lawsuits were covered in the 56th Edition of HOPE Forum, from Winter 2013/14.

Also in December of 2013, the Los Angeles filed similar lawsuits against the same banks. Before all of this, in July 2012, Wells Fargo settled a similar suit with the US Department of Justice concerning practices in Baltimore. In that case, Wells Fargo agreed to pay $7.5 million to the City of Baltimore, and $2.5 million directly to 1,000 area residents. Memphis and Chicago have also seen such lawsuits.

In July 2014, the City of Miami’s lawsuits were dismissed by federal Judge William Dimitrouleas. He said that the harm caused to the City was too loosely connected banks’ actions and that the City itself was not meant to be able to file lawsuits under the Fair Housing Act. This was reversed in September 2015 by the 11th US Circuit Court of Appeals, which did not rule on the merits of the case, only saying that the banks should have known the consequences of such practices and that the City could indeed bring the lawsuits.

These cases around the country have had mixed results. So in June 2016, the US Supreme Court announced that it would hear the Miami lawsuit (the Court combined the Miami lawsuits into one, for simplicity), in order to give national guidance. This decision could go a long way in clarifying just who can bring a case under the Fair Housing Act. We’ll keep you updated!