On September 1, 2015, the City of Los Angeles filed a motion in federal district court to dismiss its lawsuit against JPMorgan that alleged the bank had participated in discriminatory mortgage lending practices since 2004, saying the City and JPMorgan had reached an agreement in the matter.
The case — City of Los Angeles v JPMorgan Chase & Co. – was filed last year in U.S. District Court in Los Angeles and accused JPMorgan of denying credit to minority borrowers and targeting minorities for costly subprime loans. The City of Los Angeles claimed that the bank was responsible for driving up the foreclosure rate, which resulted in lost property tax revenue for the City as well as additional expenditures necessary to repair blight in neighborhoods hit hard by the foreclosure crisis.
JPMorgan denied discriminating against minority borrowers, contending that the City of Los Angeles was attempting to hold it responsible for the lending practices of Washington Mutual, which was acquired by JPMorgan in 2008.
The suit was dismissed last year by a U.S. District Court judge, who ruled that the City of Los Angeles could not sue in federal court before it had exhausted all claims against Washington Mutual with the Federal Deposit Insurance Corporation (“FDIC”). The City of Los Angeles filed an amended complaint in August 2014.
According to court records, JPMorgan argued that the amended suit should be dropped because the bank did not foreclose on a single loan to Hispanic or African-American borrowers during the time covered by the suit.
The district court judge also dismissed similar suits against Bank of America and Wells Fargo last year by the City of Los Angeles, which has appealed that ruling to the U.S. Court of Appeals for the Ninth Circuit. The City of Los Angeles is also pursuing a discriminatory lending suit against Citigroup, which is scheduled for trial in 2016.
The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services and advice for clients in all aspects of commercial compliance, business litigation and transactional law. Call us at (818) 888-2220, send an email inquiry to email@example.com or visit us online at glassgoldberg.com to learn more about the firm and to sign up for future newsletters.