Bank of America Corp. has been handed a victory in a lawsuit alleging that its discriminatory practices have eaten into the city of Miami’s coffers. But the company and several other lenders are still fighting similar battles against other cities.
The Charlotte, N.C.-based company, along with several subsidiaries, was named as a defendant in a complaint filed in December 2013.
The plaintiff in the lawsuit, which was filed in U.S. District Court for the Southern District of Florida, was the city of Miami.
BofA allegedly violated the Fair Housing Act of 1968 because of discriminatory lending practices.
The city sought injunctive relief and financial damages caused from foreclosures filed on home loans to minorities in Miami’s minority neighborhoods. The alleged discrimination was both intentional and disparate impact.
The defendants are accused of flooding under-served minority communities with high-cost predatory loans through reverse redlining. The alleged practices have been going on since 2004.
Miami claims that foreclosure rates in minority and white neighborhoods would have been comparable had BofA properly underwritten loans to minorities. Instead, minorities were put in loans that had onerous terms that they could not afford.
Evidence presented by the plaintiff showed that black borrowers were 1,581 times more likely to receive a predatory loan than white borrowers, while Hispanic borrowers were 2,807 times more likely.
BofA filed a motion to dismiss the lawsuit, claiming that the plaintiff lacks standing, that its Federal Housing Act claim is time-barred by the statute of limitations, and that the complaint fails to state a claim.
U.S. District Judge William P. Dimitrouleas agreed with BofA and granted a dismissal on Tuesday.
Similar actions have been taken by the city of Providence, R.I., which filed a complaint in May against Santander Bank, N.A.; and the city of Los Angeles, which has sued BofA, Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. In May, the judge in Los Angeles’ lawsuit against Wells Fargo denied the bank’s motion to dismiss.
