Dec 5 The city of Los Angeles has filed a
lawsuit against Citigroup and Wells Fargo, seeking
damages for a loss in tax revenue due to discriminatory mortgage
lending to the city's minority communities, a court filing
In complaints filed in the U.S. Federal Court, LA City
attorney Mike Feuer said that Citigroup and Wells Fargo "engaged
in a continuous pattern and practice of mortgage discrimination
in Los Angeles since at least 2004 by imposing different terms
or conditions on a discriminatory and legally prohibited basis."
Spokeswomen for Citigroup and Wells Fargo told Reuters that
the lawsuit is without merit.
Major banks are already waging multiple court battles
relating to their mortgage lending practices and have so far
paid billions of dollars in fines and penalties to various U.S.
Foreclosures are on the rise in many of United States' most
vulnerable neighborhoods, particularly those with substantial
concentrations of minority households, the complaint said.
The lawsuit also said that overall, low and moderate-income
African-Americans and middle and higher-income Latinos, have
experienced the highest foreclosure rates.
According to a report, during 2008-2012, the mortgage crisis
in Los Angeles resulted in over 200,000 foreclosures and an
estimated $78 billion in decreased home values. Property tax
revenue losses during that period are estimated to be $481
million, the filing showed.
"When banks engage in such discriminatory conduct, the
misconduct has profound financial consequences for the cities in
which mortgaged properties exist, and banks should be
responsible for those financial consequences. Banks should
reimburse such cities for lost tax revenues due to
discriminatory lending," the lawsuit said.
Wells Fargo spokeswoman Jennifer Temple said that the bank
is deeply disappointed by the City Attorney's decision to file a
"The accusations made by the City Attorney are baseless, do
not in any way reflect our values as a company, and we will
vigorously defend ourselves. We will continue to focus on
helping customers succeed financially and expanding
homeownership in California and across the United States,"
Temple said in an emailed statement to Reuters.
Citigroup spokeswoman Liz Fogarty said the bank is
disappointed that the LA Attorney does not recognize its deep
commitment to fair lending.
"Citi considers each applicant by the same objective
criteria, which are blind to race, ethnicity, gender and any
other prohibited basis," Fogarty said.
The case is City of Los Angeles vs Wells Fargo, Citigroup,
U.S. District Court, Central District of California.