VIOLATION OF THE FAIR HOUSING ACT-Supreme Court Ruling of Bank of America and Wells Fargo in Violation of the Fair Housing Act
The City of Miami filed suit against Bank of America and Wells Fargo alleging violations of the Fair Housing Act (FHA). The Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings and in other housing-related transactions. The City charged that the Banks intentionally targeted African-American and Latino neighborhoods and residents. They started lending to minority borrowers on worse terms than equally creditworthy non-minority borrowers and then failed to extend re-financing and loan modification to minority borrowers on fair terms.
The City alleged that these actions led to a disproportionate number for foreclosures and vacancies in minority neighborhoods. This disproportion impaired the City’s effort to assure racial integration, diminished the City’s property tax revenue, and increased demand for police, fire, and other municipal services. The Supreme Court held that the City of Miami is an aggrieved person authorized to bring suit under the Fair Housing Act. Holding that a city can sue banks that engage in predatory lending practices that increase segregation.
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