On Election Day, the Supreme Court will hear argument in a highly consequential case about lending discrimination and the subprime mortgage crisis. In this case, the City of Miami is trying to hold Wells Fargo and Bank of America accountable for well-documented deceptive, predatory lending practices. However, the banks, in an attempt to evade liability, are arguing that cities cannot seek relief from them for violations of the Fair Housing Act.
Wells Fargo has, of course, recently been in the news for secretly creating as many as 2 million unauthorized loan accounts in response to the company’s loan quotas, prompting investigations by the Department of Justice and even a Saturday Night Live sketch. But the misconduct at issue in the case before the Supreme Court runs far deeper than that: as has been well-documented, several regional and national banks targeted African American communities for deceptive, predatory loans in the lead up to the financial crisis of 2008. One of the most common types of loans used was the predatory subprime mortgage. Subprime mortgages were directed at communities that had been historically denied credit and included hidden fees, undisclosed costs, and masked terms that resulted in ballooning interest rates.
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