CUNA joined with other trade organizations Monday to file an amicus brief with the U.S. Supreme Court regarding a lawsuit that raises important questions about the scope of the Fair Housing Act. CUNA filed an amici curiae brief in April in City of Miami v. Wells Fargo and City of Miami v. Bank of America, and the Supreme Court agreed to hear the case in June.
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.
“These cities are not within the zone of interests protected by the Fair Housing Act. In enacting the FHA, Congress sought to protect individuals’ right to fair housing and to live in integrated communities,” reads CUNA’s brief, filed Monday. “It demonstrated no concern with cities’ interest in protecting their tax revenues as an objective of the FHA.”
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.
The 11th Circuit Court previously decided that Miami had a claim against the two banks, which led CUNA to join with other trade organizations to urge the Supreme Court to reverse the decision.
Since the city of Miami is claiming injury that is economic in nature, rather than the FHA mandate of preventing discrimination, CUNA believes that the damages claimed by Miami are“neither necessary nor appropriate in enforcing the [FHA’s] important anti-discrimination efforts.”
In addition to CUNA, the brief was filed 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.