WASHINGTON—CUNA, NAFCU and several other trade groups have filed an amicus brief with the U.S. Supreme Court as part of a lawsuit that challenges the scope of the Fair Housing Act.
CUNA said it filed an amici curiae brief in April in City of Miami v. Wells Fargo and City of Miami v. Bank of America, which the Supreme Court has agreed to hear.
The city of Miami brought suit against the two banks arguing that discriminatory actions against city residents entitles the city to damages for indirect harm. The city argued that foreclosures and other events stemming from unfavorable mortgages resulted in lost revenue from lower property taxes and other incurred expenses, CUNA reported.
“These cities are not within the zone of interests protected by the Fair Housing Act. In enacting the FHA, Congress sought to protect individuals’ right to fair housing and to live in integrated communities,” reads CUNA’s brief filed Monday. “It demonstrated no concern with cities’ interest in protecting their tax revenues as an objective of the FHA.”
CUNA warned that the lower court ruling could set a bad precedent that would allow other entities, such as neighboring residents, municipalities and even local businesses, to maintain suits against financial institutions, even if the entity never had any direct dealings with a credit union or bank.
The 11th Circuit Court previously decided that Miami had a claim against the two banks, which led CUNA to join with other trade organizations to urge the Supreme Court to reverse the decision.
Since the city of Miami is claiming injury that is economic in nature, rather than the FHA mandate of preventing discrimination, CUNA said it believes that the damages claimed by Miami are “neither necessary nor appropriate in enforcing the [FHA’s] important anti-discrimination efforts.”
In addition to CUNA and NAFCU, the brief was filed by the American Bankers Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Housing Policy Council of the Financial Services Roundtable, Independent Community Bankers of America, and the Mortgage Bankers Association.