Tag Archives: housing

UPDATE: On Cities As Victims

In November, we brought you news of the Supreme Court’s decision to consider whether a municipality could be  treated as an individual victim of the banking crisis.

This week, the court sided with the city, 5-3.

In other words, Miami, FL is free to pursue the banks for damages to its tax base.  The precedent will likely reverberate for years to come.

The city was finally vindicated in its 2013 move to sue Wells Fargo, Bank of America, JPMorgan Chase and Citigroup.  Miami claims the banks violated the 1968 Fair Housing Act (which prohibits racial discrimination in real estate transactions) by intentionally issuing high-risk loans to African Americans and Hispanics.  Later, there was a surge of foreclosures and lost property value.

It is unclear whether other cities around the country will now follow suit.

What did remain in doubt was the claim that the banks could know the future damage; the court did not believe the city sufficiently proved this.

From a conservative standpoint, the broadening of the scope of victimhood is troubling.  It feeds the litigious society that is eroding American values of personal responsibility.  Any individuals who are allegedly discriminated against ought to be the sole agents and benefactors of justice–not governments.

Cities As Victims

On Tuesday, November 8th, there was other news besides the shocking election of Donald Trump as President.

The US Supreme Court reviewed a lawsuit brought by the city of Miami, FL against banks  Wells Fargo and Bank of America, claiming that, under the Fair Housing Act (part of the Civil Rights Act of 1968), the banks’ negligence and prejudice was responsible for the area’s 2008 housing market collapse.

Specifically, the suit claims that subprime mortgages given to minorities contributed to falling property values, lost property tax revenue, and foreclosures and the crimes those vacant properties can bring.

A successful case like this has the potential to set a precedent of municipalities using laws intended only for individuals.

The justices’ discussion was wide-ranging, from questioning if the effects were too remote, to acknowledging the cumulative effects of bank actions on the city and public.

“The statute doesn’t prohibit decreasing property tax values, ” said Justice Kennedy.

As reported in the NYTimes, “A 4-4 tie in the Supreme Court, which seemed a viable prospect on Tuesday, would leave the appeals court’s ruling in place, handing a victory to Miami but setting no national precedent.”

So, do you think an entire town or city can claim victimhood by corporations?