Los Angeles City Attorney Mike Feuer sued JPMorgan Chase & Co. in federal court today, accusing the bank of discriminatory and predatory lending that has led to a surge in foreclosures among minorities and reduced tax revenue for the city.
Chase practiced a form of discrimination known as "reverse redlining" when it extended "mortgage credit on predatory terms to minority borrowers in minority neighborhoods in Los Angeles on the basis of the race or ethnicity of its residents," Feuer's lawsuit said.
The bank has refused to "extend mortgage credit to minority borrowers in Los Angeles on equal terms as offered to non-minority borrowers," according to the lawsuit.
Chase spokeswoman Suzanne Ryan said the bank will "vigorously defend this lawsuit."
"We are disappointed the L.A. city attorney is pursuing an adversarial approach to address city finances impacted by the recent economic downturn," she said. "While the downturn was beyond our control, we will continue to partner with Los Angeles in the recovery."
Feuer's office is seeking damages from Chase, pointing to decreased tax revenue due to the lowered values of foreclosed properties, as well as increased costs from having to deliver city services to deal with blight at vacant, foreclosed properties.
Feuer in December also sued Wells Fargo, Bank of America and Citigroup. He said a federal court judge on Wednesday shot down an attempt by Wells Fargo to dismiss a similar lawsuit filed by the City Attorney's Office.
"L.A. continues to suffer from the foreclosure crisis, from blight in our neighborhoods to diminished revenue for basic city services," Feuer said. "We're fighting to hold those we allege are responsible to account and to help bring back every community in our city."
Feuer said as an Assemblyman, he authored the Homeowners' Bill of Rights and other legislation aimed at helping homeowners struggling with foreclosure.
--City News Service