LA sues Bank of America, alleges discriminatory mortgage lending
The city of Los Angeles has filed a lawsuit against Bank of America (BAC.N) in U.S. federal court in California, accusing it of discriminatory mortgage lending in the city's minority communities.
The lawsuit, filed by City Attorney Michael Feuer, accused the bank of engaging in a "continuous pattern and practice of mortgage discrimination" since at least 2004, according to a court filing.
A spokesman for Bank of America could not immediately be reached for comment.
The complaint alleged that the bank's practices led to a wave of foreclosures in minority neighborhoods that continued to hurt the city's property tax revenues and increased the need for city services.
It seeks damages caused by the bank's alleged discriminatory practices, including lost revenue.
Major banks are fighting multiple legal battles related to their mortgage lending practices. On Monday, Bank of America said it would pay $404 million to Freddie Mac to resolve liabilities on home loans sold to the government-controlled mortgage company.
Friday's complaint accused the bank of refusing to extend mortgage credit to minority borrowers on equal terms as offered to other borrowers or extending credit on predatory terms. It said the practices placed vulnerable borrowers in loans they could not afford, including subprime loans.
Similar lawsuits were filed on Thursday against Citigroup Inc (C.N) and Wells Fargo (WFC.N). Spokeswomen for both banks told Reuters the suits were without merit.
The case is City of Los Angeles v Bank of America Corp et al, U.S. District Court, Central District of California
(Reporting by Dena Aubin in New York; Editing by Peter Cooney)
Next In Business News
Iran, Ecuador discuss ways to strengthen oil prices
QUITO Iran and Ecuador on Wednesday discussed ways that the two countries can strengthen oil prices as Iran signals it may support joint efforts by exporters to prop up flagging crude.
Libor rise, driven by U.S. money market rules, seen topping near 1.0 percent
NEW YORK Interest rates for banks to borrow U.S. dollars for three months are likely to rise further before topping out near 1.0 percent, unless the Federal Reserve raises interest rates by year-end, market watchers say.
U.S. SEC charges 71 municipal bond issuers for misleading investors
The U.S. Securities and Exchange Commission has charged 71 municipal bond issuers, including the states of Hawaii and Minnesota, as well as related entities, for using offering documents that misled investors, the agency said on Wednesday.