Eleventh Circuit Revises Miami’s Discriminatory Lending Case Against BofA, Citi, Wells

Case: Miami v. Bank of America Corp., et al.

Issue: Whether Bank of America Corp., Citigroup, and Wells Fargo violated the Fair Housing Act by targeting African-Americans and Latinos with predatory loans.

Case Summary: The Eleventh Circuit revived the City of Miami’s discriminatory lending case against Bank of America, Citigroup, and Wells Fargo alleging that the banks engaged in discriminatory lending practices that caused harm to the City.

The City brought three separate FHA lawsuits against the banks alleging that they engaged in a pattern of discriminatory lending that caused financial harm to the City by targeting African-Americans and Latinos for predatory loans. The complaint also accused the banks of engaging in redlining and reverse redlining. The City alleged that the banks’ discriminatory lending practices caused unprecedented foreclosures and sought damages based on reduced property tax revenues.

The Florida district court granted the banks’ motion to dismiss, holding that the City did not have standing to sue the banks for reduced property tax revenues under the FHA because the complaint “merely alleged a generalized policy of discrimination” and fell outside the FHA’s “zone of interests.”

On appeal, the three-judge panel for the Eleventh Circuit reversed in part the district court’s ruling. The Court ruled that the City adequately pled that its alleged injuries are covered by the FHA and demonstrated a nexus between Miami’s alleged injuries and the banks’ conduct. In the Court’s view, the district court wrongfully “applied the proximate cause analysis” and “imposed too stringent a zone of interests test” when reaching its decision. In addition, the Court ruled that the continuing violations doctrine would apply to the City’s claims “if they were adequately pled” and remanded the issue to the district court to remedy any statute of limitations deficiency.

The Court upheld the district court’s dismissal of the City’s unjust enrichment claims on the grounds that increased municipal services did not directly benefit the banks.

Bottom Line: The Court noted in its opinion that on remand, the district court may need to review the City’s claims under the U.S. Supreme Court’s recent Inclusive Communities decision.


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