LA sues big banks for mortgage discrimination

by Ryan Smith06 Dec 2013
The city of Los Angeles is accusing two big banks of discriminatory mortgage lending.

Los Angeles is suing Wells Fargo and Citigroup for damages, claiming lost tax revenue as a result of what it calls the banks’ discriminatory mortgage lending to minorities, according to a Reuters report.

The banks “engaged 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 andf legally prohibited basis,” LA City Attorney Mike Feuer wrote in a complaint filed in federal court.

The suit also claimed that low- and moderate-income African-Americans and middle- and higher-income Latinos have experienced higher foreclosure rates, according to Reuters.

“When banks engage in such discriminatory conduct, the misconduct has profound financial consequences for the cities in which mortgaged properties exist, and banks should be responsible for those financial consequences. Banks should reimburse such cities for lost tax revenues due to discriminatory lending," the lawsuit stated.

Spokespersons for both Wells Fargo and Citigroup told Reuters they consider the lawsuit meritless.

“The accusations made by the city attorney are baseless, do not in any way reflect our values as a company, and we will vigorously defend ourselves,” Wells Fargo spokeswoman Jennifer Temple told Reuters. “We will continue to focus on helping customers succeed financially and expanding homeownership in California and across the United States.”

“Citi considers each applicant by the same objective criteria, which are blind to race, ethnicity, gender and any other prohibited basis,” said Citigroup spokeswoman Liz Fogarty.


Should CFPB have more supervision over credit agencies?