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The city of Los Angeles has dropped a lawsuit accusing JPMorgan Chase & Co of discriminatory lending toward minority borrowers.
This dropped suit concluded the first of Los Angeles' four lawsuits alleging that JPMorgan and other major banks participated in discriminatory lending practices since 2004, which increased foreclosures among minority borrowers, according to Reuters and other media reports.
Reuters reported that in a recent filing from the U.S. District Court for Central District of California, the agreement terminated a lawsuit that would have held the bank liable for minority neighborhood foreclosures and lost property tax revenues caused by declining home values.
Reuters also noted that JPMorgan denied any discrimination toward minority borrowers, according to court filings.
In addition its lawsuit against JPMorgan, the city of Los Angeles is also pursuing lawsuit for nearly identical discriminatory issues with Bank of America Corp., Wells Fargo & Co, and Citigroup, Inc.
Bank of America, Wells Fargo, and Citigroup were recently in the headlines this week as the 11th U.S. Circuit Court of Appeals revived three lawsuits the were brought about by the City of Miami, accusing Wells Fargo & Co, Bank of America Corp., and Citigroup of discriminatory and predatory mortgage lending practices to minority borrowers.
The lawsuit, originally introduced to a lower court by the City of Miami on December 13, 2011, alleged that each bank in question had participated in a decade-long pattern of discriminatory lending by targeting blacks and Hispanics for predatory loans.
The court documents related to this case revealed that the city alleged that the banks “refused to extend credit to minority borrowers when compared to white borrowers,” then “when the bank did extend credit, it did so on predatory terms.”
The Los Angeles suit, and many others like it extended from the financial crisis era were brought about by local governments who claimed that "damages for economic destruction wrought nationwide by foreclosures, lost taxes and neighborhood blight," Reuters said.
Like the Miami lawsuit, the Los Angeles complaint said that JPMorgan practiced "red-lining, or the denial of credit to minority borrowers, and then reverse red-lining, or targeting minorities for costly subprime loans they could not afford," Reuters said.
A JPMorgan spokesperson said that they are happy with Los Angeles' decision and that they "have consistently supported the Los Angeles community and helped thousands of families get into homes they can afford," according to Reuters.
