Fair Lending Developments in the Wake of City of Miami

Introduction The fair lending cases filed by Miami against large mortgage lenders in 2013, in which the city sought to recover lost property tax revenues and increased municipal expenses allegedly caused by foreclosures that in turn were caused by the banks' alleged redlining (denying credit on a discriminatory basis) and reverse redlining (targeting predatory loans on a discriminatory basis), have been prominently featured in several previous Annual Surveys.1 They are featured again here because the Eleventh Circuit has issued its long-awaited decision on remand from the U.S. Supreme Court's 2017 decision in Bank of America Corp. v. City of Miami.2 While other municipal fair lending cases were stayed as the court considered petitions for rehearing en banc the remand opinion, which have now been denied,3 the Eleventh Circuit affirmed summary judgment granted in a case brought by the City of Miami Gardens. The Eleventh Circuit's Remand Ruling Almost two years after the Supreme Court ruled in City of Miami that the Eleventh Circuit erred in adopting a foreseeability standard for discrimination claims under the FHA and remanded for further consideration, the Eleventh Circuit's remand opinion was finally handed down in City of Miami v. Wells Fargo & Co 5 As noted in the previous Survey,6 no decision was forthcoming from the Eleventh Circuit, even though the two defendant banks filed motions to remand several months after the Supreme Court's ruling. Wells Fargo's petition argued, among other things, that the court's proximate cause analysis based on a "logical bond" between the violative conduct and the claimed injury did not comport with the Supreme Court's requirement that "direction relation" be alleged,28 and that the "several links" involved in the causal chain took the case outside the Supreme Court's boundaries.29 Bank of America's petition also took issue with the Wells Fargo court's "logical bond" analysis.30 The petitions were denied in August 2019,31 and the many municipal cases that were stayed pending the City of Miami decision on remand32 may now have their stays lifted. [...]it found that the district court should have dismissed the case for lack of jurisdiction.