The City of Miami has sued three major banks for what is says has been a pattern and practice of predatory lending that has hurt the city’s coffers because of foreclosures and a drop in property tax revenues.
According to the lawsuits filed in federal court last week, Bank of America, CitiGroup, and Wells Fargo violated the Federal Fair Housing Act by issuing loans to minority residents in Miami under terms and conditions that were different than those for white borrowers on a routine basis since at least 2004.
“The goal here is to punish the banks for their practices and to recover for the city and its citizens a portion of as much of the damages as is possible to recover,” said city Commissioner Francis Suarez, who sponsored an ordinance earlier this year to pursue legal remedies against the banks.
The suits were filed by a group of lawyers who sued the same banks on behalf of the City of Los Angeles earlier this month.
“Banks should not target minority neighborhoods for loans that discriminate nor make loans to minorities on terms that are worse than those offered to whites with similar credit characteristics,” according to the suits.
The banks defended their lending practices in written statements issued on Friday.
A spokesman for Wells Fargo said the banking institution was “disappointed” with the “unfounded allegations that don’t reflect our corporate values.”
CitiGroup, meanwhile, said it “considers each applicant by the same objective criteria, which are blind to race, ethnicity, gender and any other prohibited basis.”
Bank of America also defended its track record for fair lending.
“And when the country’s severe economic downturn peaked, and our customers were affected with personal financial hardships -- unemployment and underemployment, chief among them – we responded urgently with the solutions to assist them,” according to a Bank of America statement.