THE recession of 2008 wreaked havoc on minority communities in America’s cities. Using an innovative legal strategy, one particularly hard-hit city, Miami, is trying to recoup some of its losses from banks that contributed to the crisis. Miami claims it is due compensation from Bank of America and Wells Fargo under the Fair Housing Act (FHA), a law Congress passed in 1968 that bars sellers, banks and landlords from discriminating against buyers and tenants on the basis of their race. These banks, the city charges, spent a decade gracing whites with low-cost loans while targeting blacks and Latinos for their riskiest, most expensive mortgages. The ill-advised loans spurred a vicious cycle of missed payments, foreclosures, plummeting property values and urban blight that put a significant dent into Miami’s finances. The 11th Circuit Court of Appeals ruled last year that Miami may go forward with its quest to collect damages for its reduced tax base and higher demand for municipal services; the FHA, the court held, “encompasses the city’s claim”.
On November 8th, the Supreme Court heard arguments about whether that was the correct call. Three justices—Ruth Bader...Continue reading
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