CUNA learned Tuesday that the U.S. Supreme Court has agreed to review a lower court ruling that raises important questions about the scope of the Fair Housing Act (FHA). CUNA, along with other trade organizations, filed a strong amici curae brief in the case in April.
The lawsuit is City of Miami v. Bank of America and City of Miami V. Wells Fargo, and it involves a decision by the 11th Circuit Court. 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.
CUNA warned that the lower court ruling could set a bad precedent that would allow other entities, such as neighboring residents, municipalities and even local businesses, to maintain suits against financial institutions, even if the entity never had any direct dealings with a credit union or bank. CUNA’s brief urged the Supreme Court to reverse the 11th Circuit Court’s decision, and it cited other recent rulings from the Supreme Court itself, a lack of standing, and the unnecessary expansion of potential liability for lenders without any limiting factor.
CUNA was joined in that brief by the American Bankers Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Housing Policy Council of the Financial Services Roundtable, Independent Community Bankers of America, Mortgage Bankers Association and National Association of Federal Credit Unions.