Fair Lending Developments: Wrestling with Causation

[...]the U.S. Department of Housing and Urban Development has sought public comments on whether to modify its 2013 Disparate-Impact Rule. Subsequently, both banks moved to remand their cases to the district court in October 2017, which the city opposed.7 As of this writing, the Eleventh Circuit had not set a date for oral argument on the banks' motions to remand. [...]more than a year after the Supreme Court issued its decision, the Eleventh Circuit had not yet remanded the cases to the district court or otherwise disposed of them. At issue before the court in City of Miami Gardens v. Wells Fargo & Co.10 was whether there were any discriminatory loans made by the bank to minority borrowers during the limitations period that would support either a disparate treatment claim or a disparate impact claim under the Fair Housing Act ("FHA").11 The Wells Fargo court observed that its earlier rulings had required the city to allege precisely how it was injured by the bank's conduct, how the injury was traceable to the conduct of the various Wells Fargo defendants, and how the injury could be redressed by a favorable decision.12 Limited discovery was allowed on the statute of limitations question as to whether any loans issued between mid-2012 and mid-2014 violated the FHA.13 This produced a universe of 153 loans of twelve different types that were originated in the limitations period, in eluding 130 loans made to minority borrowers and eight to non-Hispanic white borrowers.14 The testimony of Miami Gardens' city manager did not identify any discriminatory or predatory loans, nor could he identify any minority borrowers who received loans that were made on different terms than those made to similarly situated white borrowers.15 The city instead relied on the testimony of an expert witness who matched two pairs of loans that he asserted showed evidence of discrimination.16 The bank's expert, on the other hand, attacked the two pairings as not showing that borrowers were similarly situated because of the receipt of lender credits to defray closing costs in exchange for higher interest rates and the receipt of certain promotional discounts, among other reasons.17 The Miami Gardens court observed that the "core issue" was whether any FHA violations occurred during the limitations period, because the city could sue for conduct occurring outside of the limitations period on a continuing violation theory only if some violations could be identified that were not barred by t