Bank of America, Wells Fargo Press Bids to Dismiss Bias Claims

By Chris Bruce

Feb. 1 — State political subdivisions such as counties have no right to sue under the Fair Housing Act (FHA), Bank of America told a federal judge in a bid to squelch lending bias claims by three Georgia counties (Cobb County v. Bank of Am. Corp., N.D. Ga., No. 15-cv-04081, motion to dismiss, 1/29/16).

The three counties in Georgia — Fulton and DeKalb, which include the city of Atlanta, and Cobb County, which lies to Atlanta's northwest —sued Bank of America in November in the U.S. District Court for the Northern District of Georgia.

The suit, one of several such actions now ongoing by local governments against major banks, alleged that Bank of America, and its Countrywide and Merrill Lynch units, violated the Fair Housing Act through “equity stripping schemes” — making loans with onerous terms based on the value of the borrower's home, but with no regard for the borrower's ability to repay.

In a Jan. 29 filing, Bank of America asked Judge Leigh Martin May to dismiss the case, calling the equity stripping theory “a complete fabrication,” and saying the counties lack standing. “Just as Georgia could not bring an FHA suit directly, neither can an arm of the Georgia government like the Counties,” the filing said.

Bank of America is represented by William V. Custer and Edwin M. Cook of Bryan Cave in Atlanta, and Thomas M. Hefferon and Matthew S. Sheldon in the Washington, D.C., offices of Goodwin Procter.

The bank also said the suit was brought too late, and that it fails to meet standards set out in a June U.S. Supreme Court ruling.

Wells Fargo Brief

Although the Georgia lawsuit is in the early stages, Wells Fargo Jan. 29 asked a different judge to dismiss a separate FHA case first filed by the city of Miami in 2013 (Miami v. Wells Fargo & Co., S.D. Fla., No. 13-cv-24508, brief filed, 1/29/16).

Judge William P. Dimitrouleas of the U.S. District Court for the Southern District of Florida dismissed the suit in 2014, saying Miami lacked standing and that the city waited too long to file the suit, but the U.S. Court of Appeals for the Eleventh Circuit revived that suit and others in September.

In its latest brief, Wells Fargo again urged Dimitrouleas to dismiss Miami's claims, saying they fail under the Fair Housing Act's two-year statute of limitations.

“Because the City has no plausible factual or legal basis for challenging loans originated in recent years, its claim is time barred,” the Jan. 29 brief said.

Wells Fargo is represented by Carol A. Licko, John F. O’Sullivan and Dwayne A. Robinson of Hogan Lovells in Miami, and Paul F. Hancock, Olivia Kelman, and Andrew C. Glass of K&L Gates in Miami and Boston.

By Chris Bruce

To contact the reporter on this story: Chris Bruce in Washington at

To contact the editor responsible for this story: Mike Ferullo at

The Bank of America brief is at The Wells Fargo brief is at