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Los Angeles Sues Nation’s Largest Banks

The city of Los Angeles launched a series of lawsuits against three of the nation's largest banks alleging they persisted in discriminatory lending practices that contributed to more than 200,000 foreclosures between 2008 and 2012 that cost the city more than $1.2 billion.

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The city ""filed lawsuits"":http://atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_027426.pdf against ""Citigroup"":http://www.citigroup.com/citi/ and ""Wells Fargo"":https://www.wellsfargo.com/ last Thursday and a ""suit"":http://atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_027430.pdf against ""Bank of America"":https://www.bankofamerica.com/ Friday.

""Today we begin to address the devastating consequences of the foreclosure crisis in America's second largest city,"" Mike Feuer, Los Angeles city attorney, said in a ""press statement"":http://atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_027426.pdf coinciding with last week's filings in U.S. Federal Court.

""These lawsuits send the firm message that we will use every tool at our disposal to fight for all Los Angeles taxpayers and neighborhoods,"" Feuer said.

Feuer alleges in the lawsuits that the banks ""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.""

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The lawsuits charge all three banks with redlining and reverse redlining.

Cited in the court filing is a study by the ""Alliance of Californians for Community Empowerment"":http://www.calorganize.org/, which estimates the more than 200,000 foreclosures in Los Angeles during the foreclosure crisis resulted in $78 billion in decreased home values, $481 million in lost tax revenue, and $1.2 billion in additional services to maintain vacant and foreclosed properties.

The banks deny the allegations of discriminatory lending.

A spokesperson for Bank of America told _DS News,_ ""Our record demonstrates there is no basis for the city's claims."" The spokesperson stated the institution ""has deep ties to this community"" and said Bank of America has ""a firm commitment and strong track record for fair lending.""

Citi responded similarly, claiming the lawsuit is ""without merit"" and saying, ""We are disappointed that the LA attorney does not recognize our 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,"" a Citi spokesperson said.

Wells Fargo could not be reached for comment, but the bank reportedly told the ""_Los Angeles Times_"":http://www.latimes.com/business/money/la-fi-mo-city-attorney-lending-20131205,0,2334127.story#axzz2nHv7ycdF it maintains a record ""as a fair and responsible lender.""

In the lawsuit against Wells Fargo, Feuer mentions that the bank has already faced similar lawsuits from the city of Baltimore, the city of Memphis, the Department of Justice, and the Federal Reserve Bank. Wells Fargo's 2011 legal battle with the Federal Reserve resulted in an ""$84 million penalty,"":http://dsnews.comarticles/fed-assesses-85m-penalty-against-wells-fargo-2011-07-21 the largest the Fed has ever claimed in a consumer protection case.

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