A case accusing big banks of providing predatory mortgages to minorities in Miami has been revived
A federal appeals court has reopened three lawsuits in which the City of Miami alleges three big banks engaged in predatory lending to African-American and Hispanic borrowers.
"It is clear that the harm the city claims to have suffered has a sufficiently close connection to the conduct the [Fair Housing Act] prohibits," Circuit Judge Stanley Marcus writes, according to Reuters.
The 11th U.S. Circuit Court of Appeals voted 3-0 to revive the case, one that was dismissed by a lower court. That dismissal came in July of last year, when U.S. District Judge William Dimitrouleas determined Miami lacked sufficient evidence to sue.
The city claims Well Fargo, Bank of America and Citigroup discriminated against African-American and Hispanic borrowers by directing them to take out pricier loans many, oftentimes, couldn’t afford.
For its part, Bank of America spokesman Rick Simon spoke to Reuters and defended the bank’s lending practices. Wells Fargo and Citigroup have yet to comment.
"Our record demonstrates a firm commitment and strong record for fair and responsible lending and community revitalization," he said.
The reopened case comes on the heels of a recent Florida Atlantic University study’s findings suggest there is a discrepancy in mortgage rates paid by African-American and white homebuyers.
More specifically, the average African-American borrowers pay on average about 29 basis points more on a loan than the average Caucasian borrower. Young African-Americans with low levels of education and those with low incomes pay the highest, the study found.
With files from Reuters
"It is clear that the harm the city claims to have suffered has a sufficiently close connection to the conduct the [Fair Housing Act] prohibits," Circuit Judge Stanley Marcus writes, according to Reuters.
The 11th U.S. Circuit Court of Appeals voted 3-0 to revive the case, one that was dismissed by a lower court. That dismissal came in July of last year, when U.S. District Judge William Dimitrouleas determined Miami lacked sufficient evidence to sue.
The city claims Well Fargo, Bank of America and Citigroup discriminated against African-American and Hispanic borrowers by directing them to take out pricier loans many, oftentimes, couldn’t afford.
For its part, Bank of America spokesman Rick Simon spoke to Reuters and defended the bank’s lending practices. Wells Fargo and Citigroup have yet to comment.
"Our record demonstrates a firm commitment and strong record for fair and responsible lending and community revitalization," he said.
The reopened case comes on the heels of a recent Florida Atlantic University study’s findings suggest there is a discrepancy in mortgage rates paid by African-American and white homebuyers.
More specifically, the average African-American borrowers pay on average about 29 basis points more on a loan than the average Caucasian borrower. Young African-Americans with low levels of education and those with low incomes pay the highest, the study found.
With files from Reuters
