CUNA, trades call for SCOTUS review of FHA municipality suit

CUNA and several financial services trade organizations petitioned the U.S. Supreme Court this week to review a case involving Fair Housing Act (FHA) claims filed by municipalities. CUNA and the trades ask the Supreme Court to review Bank of America v. City of Miami and Wells Fargo v. City of Miami, as the organizations have a “significant interest in ensuring the FHA is enforced in a fair and reasonable way.”

The city of Miami brought suit against the two banks arguing that discriminatory actions against city residents entitles the city to damages for indirect harm. The city argued that foreclosures and other events stemming from unfavorable mortgages resulted in lost revenue from lower property taxes and other incurred expenses.

“The court of appeals held that the proximate cause requirement for private litigation under the FHA imposes little if any effective limitation on novel FHA claims by plaintiffs who are not the direct victims of an alleged FHA violation and instead seek compensation for “ripples of harm” extending outwards from such violations,” the brief reads. “The massive wave of litigation under the FHA—brought by private lawyers on behalf of municipalities—will impose potentially enormous costs on lenders without significantly advancing the goals of the FHA.”


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