Supreme Court ruling paves way for cities to sue banks over predatory lending

A ruling by the Supreme Court Monday cleared the way for cities like Los Angeles to sue big banks over discriminatory lending practices that hurt buyers in low-income neighborhoods during the financial crisis.

The decision, which expands consumer protections under the Fair Housing Act, means cities — not just individuals — can pursue claims against the banks, the Los Angeles Times reported. Previously, lawyers for the big banks argued that only private citizens could sue, since the law covered racial discrimination against “any person.”

The ruling, penned by Justice Stephen Breyer, clears the way for the City of Miami to sue Bank of America for alleged “intentionally targeted predatory practices.” City attorneys for L.A. and San Francisco said they’d also filed suits against the banks.

The ruling wasn’t a total win for cities, however, since the court said it wasn’t convinced that predatory lending was the cause of lost property tax revenues for cities. [LAT] — Cathaleen Chen