By Andrew A. Turner, J.D.
Cook County, Ill., which includes Chicago, has standing under the Fair Housing Act to sue HSBC North America Holdings Inc. with claims that HSBC discriminatorily targeted minority homeowners in the county for predatory subprime mortgage loans, according to a decision by a federal district court judge. In previous opinions in lawsuits based on similar claims brought by Cook County against Wells Fargo and Bank of American, one judge reached the same result and another arrived at an opposite conclusion.
In the most recent case, the court found that the county was within the “zone of interests” the FHA was intended to protect based on allegations that discriminatory actions increased the minority borrowers’ risks of default and foreclosure, resulting in a rash of foreclosures in the county, which in turn caused economic and noneconomic injury to Cook County (County of Cook v. HSBC North America Holdings Inc., Sept. 30, 2015, Lee, J).
Earlier in the year, another court in the district found statutory standing under similar circumstances, concluding that counties and municipalities have standing to sue for alleged FHA violations based on asserted injuries to their tax base and revenues (County of Cook v. Bank of America Corp., March 19, 2015, Bucklo, J).
However, another decision in the district has taken a different view, ruling that the county was not within the FHA’s zone of interests. FHA protections extend to “reverse redlining” (the practice of steering minorities into more expensive loans, as opposed to simply denying them loans). While affected minority borrowers can sue under the FHA for their losses, the court said Cook County lacked authorization to sue under the law becuase it could not claim that it was denied a loan nor offered unfavorable terms (County of Cook v. Wells Fargo & Co., July 17, 2015, Feinerman, J).
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