Monday, May 01, 2017 11:54 AM

SUPREME COURT SAYS CITIES CAN SUE BANKS OVER PREDATORY LOANS

The Supreme Court ruled Monday that cities can sue banks over predatory loans but will have a hard time winning.(Photo: SAUL LOEB, AFP/Getty Images)

WASHINGTON The Supreme Court ruled Monday that cities can sue banks fordiscriminatory mortgage lending practices, but they must prove that predatory loans led to damages such as lost tax revenue and higher spending on municipal services.

The decision was a partial victory both for Miami, which sought standing to sue banks under the Fair Housing Act, and for Bank of America and Wells Fargo, which argued that the city's damages were too many steps removed from the original loans.

The 5-3 ruling was written by Justice Stephen Breyer and backed by the court's liberal justices and Chief Justice John Roberts. Three justices Clarence Thomas, Anthony Kennedy and Samuel Alito argued thatthe city had no right to sue under the landmark 1968 civil rights law in the first place. Newly confirmed Justice Neil Gorsuch did not take part in the decision.

"The city's claimed injuries fall within the zone of interests that the FHA arguably protects," Breyer wrote. "Hence, the city is an 'aggrieved person' able to bring suit under the statute."

But he warned:"The housing market is interconnected with economic ...

News source: USA Today

See also: Davis & Hoss