The U.S. Supreme Court on Tuesday agreed to decide whether Miami can pursue lawsuits accusing major banks of predatory mortgage lending to black and Hispanic homebuyers resulting in loan defaults that drove down city tax revenues and property values.
The justices will hear appeals filed by Bank of America Corp and Wells Fargo & Co of a lower court's decision to permit the lawsuits by the Florida city against the banks under the Fair Housing Act, a federal law outlawing discrimination in housing.
Last September, the Atlanta-based 11th U.S. Circuit Court of Appeals overturned a lower court's decision to dismiss such lawsuits by the city against Bank of America, Wells Fargo and Citigroup Inc. Citigroup decided not to appeal to the Supreme Court. The city accused the banks of a decade of lending discrimination in its residential housing market.
Miami accused Wells Fargo, Bank of America and Citigroup of steering non-white borrowers into higher-cost loans they often could not afford, even if they had good credit.
The city said the banks' conduct caused Miami to lose property tax revenues, drove down property values and required the city to pay the costs of repairing and maintaining properties that went into foreclosure due to discriminatory lending.
The Supreme Court will hear oral arguments and issue a ruling in its next term, which starts in October and ends in June 2017.