Banking lawsuits

Judge dismisses two city of Miami predatory lending lawsuits

 

dsmiley@MiamiHerald.com

In rulings that could have broader implications, a federal judge has dismissed lawsuits by the city of Miami claiming that predatory lending by Bank of America and Citigroup created a foreclosure crisis in minority communities and caused the city’s tax base to plummet.

Judge William Dimitrouleas ruled Wednesday that the city, which claimed the banks violated the 1968 U.S. Fair Housing Act by targeting minority communities with onerous and high-interest loans, had no standing to sue Citigroup for economic loss. He also said the statute of limitations had run out on the cases they cited, and he dismissed the city’s claim that the banks had “unjustly enriched” themselves because the homes were subject to benefit from municipal services.

Dimitrouleas’ ruling followed a similar decision Tuesday on a motion by Bank of America to dismiss the city’s lawsuit.

“The City’s complaints of decreased tax revenue and increased municipal services are ‘so marginally related to’” the Fair Housing Act that the city had no grounds to sue, Dimitrouleas wrote.

The rulings are a potentially damaging blow to not only the city of Miami — which filed similar suits against two other banks — but also for Miami Gardens, which has filed its own predatory lending lawsuits and is represented by the same firm as Miami. The city of Los Angeles also has filed predatory lending suits in cases that so far have had different outcomes.

Miami City Attorney Victoria Mendez said little Thursday about the ruling except that she would “regroup with our outside counsel and see what’s next.”

Bank of America, meanwhile, celebrated.

“Our record demonstrates a firm commitment and strong record for fair and responsible lending and community revitalization. We responded with urgency to rising mortgage defaults that resulted from the country’s severe economic downturn, which the Miami suit all but ignored,” bank spokesman Rick Simon said in a statement.

Attorneys and officials for the city of Miami Gardens did not respond to requests for comment.

Both Miami and Miami Gardens sued Bank of America, JPMorgan Chase, Wells Fargo and CitiGroup. Miami officials first filed suit in December against three banks, and then sued JPMorgan Chase last month. The city of Miami Gardens also filed suit last month.

Dimitrouleas is the judge in all four of Miami’s cases. Three different judges are presiding over Miami Gardens’ lawsuits.

Both cities were represented by the firm of Harke Clasby & Bushman. Attorney Lance Harke told The Herald he was out of town and was not in a position to comment on the ruling.

Miami Herald staff writer Lance Dixon contributed to this report.

Read more Breaking News stories from the Miami Herald

  • Federal court upholds Fla.'s docs vs. glocks law

    A Florida law restricting what doctors can tell patients about gun ownership was deemed to be constitutional Friday by a federal appeals court, which said it legitimately regulates professional conduct and doesn't violate the doctors' First Amendment free speech rights.

  •  
A workman quickly slides a dustmop over the floor at the Central Intelligence Agency headquarters in Langley, Va., near Washington, in this March 3, 2005 file photo. About a dozen former CIA officials named in a classified Senate report on decade-old agency interrogation practices were notified in recent days that they would be able to review parts of the document in a secure room in suburban Washington after signing a secrecy agreement. Then, on Friday, July 25, 2014 many were told they would not be able to see it, after all.

    Some in 'torture' report denied chance to read it

    About a dozen former CIA officials named in a classified Senate report on decade-old agency interrogation practices were notified in recent days that they would be able to review parts of the document in a secure room in suburban Washington after signing a secrecy agreement.

  •  
A sign stands at 1448 NW 103rd St. in Miami to let passers-by know the government demolished the house even though the owner was on active military duty.

    Miami-Dade County

    Miami-Dade demolished active-duty soldier’s home

    A federal judge ruled last week that the county should have delayed building-code violation proceedings against the soldier when he asked for a stay while he was in Iraq.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category