By Chris Bruce
Wells Fargo will have to keep fighting Philadelphia’s allegations of lending bias, a federal judge said Jan. 16.
The ruling by Judge Anita B. Brody of the U.S. District Court for the Eastern District of Pennsylvania allows Philadelphia to press claims that Wells Fargo violated the Fair Housing Act, allegedly by targeting black and Latino residents for higher-cost loans.
It’s one of several such cases now ongoing against Wells Fargo, Bank of America, and other banks. Those suits allege that lending practices triggered foreclosures that brought about wider economic harm such as lower tax revenues and higher municipal costs.
Wells Fargo asked Brody to dismiss Philadelphia’s suit, arguing among other points that the city didn’t allege direct proximate cause as required by a recent U.S. Supreme Court ruling on how such suits must proceed.
Brody, while voicing reservations about some of the city’s claims, said Philadelphia has shown enough at this point to maintain the lawsuit. Because the city “plausibly” pleaded proximate cause for certain non-economic injuries, proximate cause in connection with economic injury doesn’t have to be addressed for now, she said.
“The Court admittedly has serious concerns about the viability of the economic injury aspect of the City’s claim with regard to proximate cause,” Brody said. “Nevertheless, Wells Fargo has not met its burden to show why the City’s entire FHA claim should be dismissed.”
In an email to Bloomberg Law, Wells Fargo spokesman Tom Goyda called the ruling disappointing, but said it “in no way suggests that the claims ultimately will prevail.”
“Wells Fargo has been a part of the Philadelphia community for more than 140 years and we are prepared to defend our record as a fair and responsible lender,” Goyda said. “We will continue to focus on helping customers in Philadelphia and its surrounding communities succeed financially, and on expanding homeownership in Pennsylvania and across the United States.”
Philadelphia representatives didn’t immediately respond to a request for comment.
Case: Philadelphia v. Wells Fargo & Co. , E.D. Pa., 17-cv-02203, 1/16/18
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