Philadelphia Sues Wells Fargo Over Predatory Lending Practices
On May 15, 2017, Philadelphia sued Wells Fargo for alleged predatory lending in violation of the Fair Housing Act of 1968. The lawsuit comes two weeks after the Supreme Court ruled that cities can sue banks that possibly could have targeted minorities with bad loans. The city’s lawsuit, filed in the U.S. district Court in Philadelphia, says Wells Fargo purposefully pitched high-risk loans to black and Latino borrowers, though they were eligible to apply for better loans. The lawsuit says Wells Fargo was aware of this imbalance, and even encouraged employees to take advantage of it.
The claims are similar to those made by the city of Miami, which the U.S. Supreme Court ruled earlier this month that Miami could proceed with its lawsuits against banks for targeting minority customers. Like Philadelphia’s lawsuits, Miami alleged that banks unfairly targeted minority borrowers with bad loans. Then after the financial crisis, these customers, and even entire communities, saw unequal rates of foreclosure. Miami claimed that the discriminatory lending by Bank of America and Wells Fargo, caused undue financial harm on the city, increased segregation, and lowered property values. The Supreme Court’s decision was important because this is the first time a city representing entire communities has sued under the FHA. Miami’s case has returned to a federal appeals court in Atlanta, which will decide how much proof Miami needs to show in order to demonstrate the banks knowingly discriminated against communities. That decision, too will likely set precedent for other cities, as Los Angeles, Oakland, Baltimore, and Memphis have all filed similar lawsuits.
In its lawsuit, Philadelphia said an analysis found that more than 23 percent of loans to minority customers were high-risk or high-cost, while only 7.6 percent of white customers were given similar terms. Philadelphia has asked Wells Fargo to end these practices, and is seeking monetary damages from lost taxes, lowered property values, and compensation for increased segregation.
Philadelphia Commercial Lawyers of Sidkoff, Pincus & Green P.C. Defend Against Predatory Lending Practices
Attorneys at Sidkoff, Pincus & Green P.C. represent those affected by predatory lending practices. To schedule a consultation with an experienced Philadelphia commercial lawyer, call 215-574-0600 today or contact us online. From our Center City Philadelphia office, we represent clients throughout Pennsylvania and South Jersey.