Miami Accuses Banks of Reverse Redlining
MIAMI (CN) - Miami sued Wells Fargo Bank and Citigroup, claiming their predatory lending, redlining and reverse redlining devastated minority neighborhoods with foreclosures.
The City of Miami sued the two giant banks in separate, similar federal lawsuits. Citations in this article are from the 67-page complaint against Wells Fargo.
The city claims Wells Fargo unjustly enriched itself by violating the Fair Housing Act.
It claims the bank has targeted minorities since 2004 with predatory lending on mortgages.
Miami's lawsuits continue a series of similar, reverse-redlining complaints from other cities.
Rather than refusing to make loans in poor and minority neighborhoods - traditional redlining - reverse redliners target poor and minority areas for predatory loans.
"The pattern and practice of lending discrimination engaged in by Wells Fargo consists of traditional redlining and reverse redlining, both of which have been deemed to violate the FHA by federal courts throughout the country," the complaint states. "Wells Fargo engaged in redlining, and continues to engage in said conduct, by refusing to extend mortgage credit to minority borrowers in Miami on equal terms as to non-minority borrowers. Wells Fargo engaged in reverse redlining, and continues to engage in said conduct, by extending mortgage credit on predatory terms to minority borrowers in minority neighborhoods in Miami on the basis of the race or ethnicity of its residents."
Miami claims Wells Fargo's redlining and reverse redlining caused "an excessive and disproportionately high number of foreclosures on the Wells Fargo Loans it has made in the minority neighborhoods of Miami."
Miami seeks injunctive relief, and compensatory and punitive damages.
Its lead counsel is Lance Harke, with Harke Clasby & Bushman.