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MarketScreener Homepage  >  Equities  >  Nyse  >  Wells Fargo & Company    WFC

WELLS FARGO & COMPANY

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LA sues Citi, Wells Fargo over discriminatory mortgage lending

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12/06/2013 | 12:35am EST
A man watches police officers make arrests as protesters from political activist group 99 Rise stage a sit-in at a CitiBank branch in Los Angeles

(Reuters) - The city of Los Angeles has filed a lawsuit against Citigroup (>> Citigroup Inc) and Wells Fargo (>> Wells Fargo & Co), seeking damages for a loss in tax revenue due to discriminatory mortgage lending to the city's minority communities, a court filing showed.

(Reuters) - The city of Los Angeles has filed a lawsuit against Citigroup (>> Citigroup Inc) and Wells Fargo (>> Wells Fargo & Co), seeking damages for a loss in tax revenue due to discriminatory mortgage lending to the city's minority communities, a court filing showed.

In complaints filed in the U.S. Federal Court, LA City attorney Mike Feuer said that Citigroup and Wells Fargo "engaged in a continuous pattern and practice of mortgage discrimination in Los Angeles since at least 2004 by imposing different terms or conditions on a discriminatory and legally prohibited basis."

Spokeswomen for Citigroup and Wells Fargo told Reuters that the lawsuit is without merit.

Major banks are already waging multiple court battles relating to their mortgage lending practices and have so far paid billions of dollars in fines and penalties to various U.S. authorities.

Foreclosures are on the rise in many of United States' most vulnerable neighborhoods, particularly those with substantial concentrations of minority households, the complaint said.

The lawsuit also said that overall, low and moderate-income African-Americans and middle and higher-income Latinos, have experienced the highest foreclosure rates.

According to a report, during 2008-2012, the mortgage crisis in Los Angeles resulted in over 200,000 foreclosures and an estimated $78 billion in decreased home values. Property tax revenue losses during that period are estimated to be $481 million, the filing showed.

"When banks engage in such discriminatory conduct, the misconduct has profound financial consequences for the cities in which mortgaged properties exist, and banks should be responsible for those financial consequences. Banks should reimburse such cities for lost tax revenues due to discriminatory lending," the lawsuit said.

Wells Fargo spokeswoman Jennifer Temple said that the bank is deeply disappointed by the City Attorney's decision to file a "meritless" lawsuit.

"The accusations made by the City Attorney are baseless, do not in any way reflect our values as a company, and we will vigorously defend ourselves. We will continue to focus on helping customers succeed financially and expanding homeownership in California and across the United States," Temple said in an emailed statement to Reuters.

Citigroup spokeswoman Liz Fogarty said the bank is disappointed that the LA Attorney does not recognize its deep commitment to fair lending.

"Citi considers each applicant by the same objective criteria, which are blind to race, ethnicity, gender and any other prohibited basis," Fogarty said.

The case is City of Los Angeles vs Wells Fargo, Citigroup, U.S. District Court, Central District of California.

(Reporting by Sakthi Prasad in Bangalore; Editing by Supriya Kurane)

By Sakthi Prasad

Stocks treated in this article : Citigroup Inc, Wells Fargo & Co
Stocks mentioned in the article
ChangeLast1st jan.
CITIGROUP INC. 1.47% 75.81 Delayed Quote.45.62%
WELLS FARGO & COMPANY 2.14% 54.37 Delayed Quote.17.99%
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Financials (USD)
Sales 2019 84 338 M
EBIT 2019 29 169 M
Net income 2019 20 002 M
Debt 2019 -
Yield 2019 3,52%
P/E ratio 2019 12,0x
P/E ratio 2020 12,6x
Capi. / Sales2019 2,73x
Capi. / Sales2020 2,87x
Capitalization 230 B
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