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Lawyers’ Committee for Civil Rights Under Law Files Amicus Brief Showing How Discriminatory Mortgage Lending Harms Cities

For Immediate Release November 15, 2017

Lost Property Tax Revenue and Increased Costs Are the Direct and Foreseeable Results of Racially Discriminatory Reverse Redlining

WASHINGTON, D.C. – This week, the Lawyers’ Committee for Civil Rights Under Law, the National Fair Housing Alliance, the Poverty and Race Research Action Council, and a group of housing scholars filed an amicus curiae, “friend of the court,” brief inCity of Oakland v. Wells Fargo & Co. a case pending in the U.S. District Court for the Northern District of California involving the harm inflicted on cities by the targeting of predatory high-cost loans at communities of color. Attorneys from the Lawyers’ Committee for Civil Rights Under Law, the law firms of Brancart & Brancart and Cohen Milstein Sellers & Toll PLLC, and the National Fair Housing Alliance served as co-counsel on the brief.

The brief was filed in support of the plaintiff’s opposition to Wells Fargo’s motion to dismiss the City of Oakland’s complaint in which the City alleges that the bank’s lending practices discriminated against persons of color and resulted in concentrated foreclosures in predominantly African American and Latino neighborhoods. In turn, these foreclosures caused a loss of property tax revenue for the City and increased code enforcement and other costs for the City. The types of practices that the City is challenging significantly contributed to the 2008 financial crisis and ensuing recession, which exacerbated the racial wealth gap.

The motion to dismiss focuses on an issue arising from the recent Supreme Court decision in Bank of America Corp. v. City of Miami, which held that cities had standing to initiate such suits under the Fair Housing Act, but that they must allege that a defendant’s discriminatory conduct is the proximate cause of the harm they have experienced. The Supreme Court’s decision remanded to the lower courts to address the standards for demonstrating proximate cause and whether the City’s complaint met that standard.

The City of Oakland case is very similar to the City of Miami case. In their brief, the civil rights groups and housing scholars argue that that the broad remedial purposes of the Fair Housing Act necessitate a flexible and broad standard of proximate cause and that the harm that Oakland alleges from the discriminatory predatory mortgage lending meets this standard.

“The deliberate targeting of African-American and Latino communities with predatory subprime mortgages has devastated cities across the country,” said Kristen Clarke, president and executive director of the Lawyers’ Committee for Civil Rights Under Law. “Congress passed the Fair Housing Act in 1968 precisely in order to counteract the wide-ranging effects of practices that are the direct historical antecedents to this kind of discrimination.”

“The Supreme Court’s recent decision in Bank of America, et al. v. City of Miami ratified the broad scope of the Fair Housing Act for those seeking to redress harm for discriminatory conduct,” said Shanna L. Smith, president, and CEO of the National Fair Housing Alliance. “Thus, the National Fair Housing Alliance strongly supports the City of Oakland’s lawsuit holding Wells Fargo accountable for the deep injury to communities of color, suffered from the toxic loans during the foreclosure crisis.”

“The banking industry’s discriminatory reverse redlining practices have caused direct harm to cities like Oakland in the form of lost tax revenue and increased spending on municipal services in the minority areas the banks have targeted,” said Brian Corman, an associate at Cohen Milstein. “Oakland’s injury is separate and distinct from the harm done to individual victims of discrimination, and the Fair Housing Act is the means by which Oakland’s harms may be redressed.”

“Institutions like Wells Fargo don’t make their profits in a vacuum: they have an enormous effect on the communities they are supposed to serve,” said Megan Haberle, director, Housing Policy for the Poverty and Race Research Action Council. “The claims, in this case, reflect that plain reality. As our brief makes clear, we need our civil rights laws to remain as powerful as they were designed to be.”

To read the full amicus brief, click here.

 

About the Lawyers’ Committee for Civil Rights Under Law:

The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination.  Now in its 54th year, the Lawyers’ Committee for Civil Rights Under Law is continuing its quest “Move America Toward Justice.” The principal mission of the Lawyers’ Committee for Civil Rights Under Law is to secure, through the rule of law, equal justice for all, particularly in the areas of criminal justice, fair housing and community development, economic justice, educational opportunities, and voting rights.

About the National Fair Housing Alliance

Founded in 1988, NFHA is a consortium of more than 220 private, nonprofit fair housing organizations, state and local civil rights agencies, and individuals from throughout the United States.  Headquartered in Washington, D.C., NFHA works to eliminate housing discrimination and ensure equal housing opportunity for all people through leadership, education, outreach, membership services, public policy initiatives, community development, advocacy, and enforcement.

About the Poverty & Race Research Action Council

The Poverty & Race Research ActionCouncil (PRRAC) is a civil rights policy organization based in Washington, D.C. Founded in 1989 by national civil rights and poverty law organizations, PRRAC’s primary mission is to help connect advocates with social scientists working on race and poverty issues, and to promote a research-based advocacy strategy on structural inequality issues. PRRAC’s current work focuses on the importance of “place” and the continuing consequences of historical patterns of housing segregation and disinvestment for low income families in the areas of health, education, employment, and incarceration. PRRAC also publishes the bimonthly newsletter/journal Poverty & Race. For more information, see www.prrac.org.

About Cohen Milstein Sellers & Toll PLLC

For over 45 years, Cohen Milstein has fought corporate abuse, pursuing litigation on behalf of affected individuals, whistleblowers, public entities and other institutions in cases that have raised challenging, significant and often novel issues. The firm specializes in holding large corporations accountable for their actions even though they often have significantly more resources than those damaged by their misconduct. Often, this is accomplished by bringing large numbers of plaintiffs together in a single class to enhance their ability to litigate effectively. One of the premier firms in the country handling major complex plaintiff-side litigation, Cohen Milstein has over 90 attorneys in offices in Washington, DC; New York, NY; Philadelphia, PA; Chicago, IL; Denver, CO; Raleigh, NC; and Palm Beach Gardens, FL.http://www.cohenmilstein.com/

 

Contact:

 

Derrick Robinson

Lawyers’ Committee for Civil Rights Under Law

Drobinson@lawyerscommittee.org

 

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