BofA Beats Los Angeles Claims Over Predatory Minority Loans

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Bank of America Corp. can’t be sued by Los Angeles over claims it flooded minority neighborhoods with high-cost, predatory loans.

A federal judge threw out the case, saying the city hadn’t shown it was harmed. The city’s lawsuits against three other banks remain pending.

“The city has no evidence that it has suffered any damages as a result of defendants’ allegedly discriminatory loans,” U.S. District Judge Percy Anderson said in a May 11 ruling made public Thursday.

The city sued the Charlotte, North Carolina-based bank, along with JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. It blamed the banks for reduced property taxes and increased costs resulting from the disproportionate number of foreclosures in minority neighborhoods after the collapse of the U.S. housing market in 2008.

“We are pleased that the court dismissed the city’s claims that we have discriminated against African-American and Hispanic borrowers,” Bank of America said in a statement. “Our record demonstrates a firm commitment and strong record for fair and responsible lending and community revitalization.”

The city filed the case in December 2013 under the U.S. Fair Housing Act, which has a two-year statute of limitations. In the previous two years, only two allegedly discriminatory Bank of America loans resulted in foreclosures, according to the ruling.

Los Angeles City Attorney Mike Feuer is reviewing the decision and has no further comment, said his spokesman, Rob Wilcox.

The case is City of Los Angeles v. Bank of America Corp., 13-cv-09046, U.S. District Court, Central District of California (Los Angeles).

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