Los Angeles accuses JPMorgan of targeting minorities with risky loans

by Adam Smith02 Jun 2014
The city of Los Angeles has filed suit against JPMorgan, accusing the lender of steering minority borrowers into risky home loans they couldn't afford.

The LA Times has reported that the city of Los Angeles filed suit on Friday in U.S. District Court, accusing JPMorgan of engaging in "a continuous pattern and practice of mortgage discrimination in Los Angeles since at least 2004 by imposing different terms or conditions on a discriminatory and legally prohibited basis".

The city has argued that JPMorgan's actions triggered a wave of foreclosures that depressed Los Angeles property values and hit city revenues.

“L.A. continues to suffer from the foreclosure crisis -- from blight in our neighborhoods to diminished revenue for basic City services," L.A. City Atty. Mike Feuer said in a statement.  "We're fighting to hold those we allege are responsible to account and to help bring back every community in our City."

The city last year filed similar suits against Wells Fargo, Citigroup and Bank of America. The lenders have all denied the charges, and JPMorgan has vowed to "vigorously defend" the lawsuit. Company spokesman Jason Lobo denied the suit's claims, accusing the L.A. City Attorney of an "adversarial approach".

“The facts don’t support their claims and are contradicted by our demonstrated commitment to minorities in the Los Angeles area,” Lobo said.

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