Supreme Court rules that a city has a claim against a bank for the consequences of discriminatory subprime mortgages

In Bank of America Corp. v. City of Miami, 137 S.Ct. 1296, 197 L. Ed. 2d 678 (2017), the Supreme Court held that the City of Miami was an "aggrieved person" within the meaning of the Fair Housing Act, 42 U.S.C. §3602(i), and that it could sue the Bank of America (and other banks) for lost tax revenue and other municipal expenses resulting from alleged discriminatory grants of subprime mortgages to Miami residents that resulted in mass foreclosures and vacancies. While it violates the FHA to deny mortgages on the basis of race, it also violates the FHA to target a racial group for disfavored terms. The Court noted that it had been previously held that white persons have a claim under the FHA when they are deprived of the benefits of interracial associations when discriminatory rental practices kept African Americans out of a rental complex (citing Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 209 (1972). The City similarly claims financial injury that is "'arguably within the zone of interests' the FHA protects." 197 L.Ed. 2d at 687. The complaint alleges that the banks "intentionally targeted predatory practices at African-American and Latino neighborhoods and residents" and that this "unlawful conduct led to a 'concentration' of 'foreclosures and vacancies' in those neighborhoods" which "caused 'stagnation and decline in African-American and Latino neighborhoods" while reducing property values, thereby "diminishing the City's propertyl-tax revenue and increasing demand for municipal services." 197 L.Ed. 2d at 689. These "economic injuries arguably fall within the FHA's zone of interests." Id.