The Supreme Court ruled Monday that cities, and not just individuals have the right to sue banks under the Fair Housing Act over lending practices. The ruling allowed the city of Miami’s suit against Bank of America and Wells Fargo to proceed.
The lawsuits date back to 2013 when Miami alleged that the banks charged excessive rates to minority borrowers and then refused to modify the loans as they defaulted. Key to the Courts decision was Congress’ decision to not change the definition of who can sue under the Fair Housing Act after the Court ruled it should be interpreted broadly.
It was not, however, a complete victory for Miami. The Court also struck down a part of the 11th Circuit Court of Appeals ruling that stated that damages can be assessed on the basis of the foreseeability of the damage from banks’ loans. To recover, Miami and other cities have to show a direct link between the lending practices of banks. The lower Court must now reconsider its previous decision.
In a dissenting opinion, Justice Thomas wrote that the Court’s interpretation of the Fair Housing Act was too broad, with the act originally intended to combat discrimination and not other factors such as lowered property values.