Citgroup Inc. and its lawyers at Mayer Brown failed to knock out a lawsuit by the city of Los Angeles accusing the bank of discriminatory mortgage lending practices from 2004 through 2011. U.S. District Judge Otis Wright II in Los Angeles denied Citigroup’s motion to dismiss with this 22-page decision Monday.
The lawsuit is one of four that L.A. City Attorney Mike Feuer has brought under the federal Fair Housing Act, with help from Hagens Berman Sobol Shapiro, which is working for a contingency fee. The city sued Wells Fargo & Co., Bank of America Corporation and Citigroup in December 2013 and followed up with claims against JPMorgan Chase & Co. last month. The lawsuits contend that the banks have engaged in redlining—denying credit to certain neighborhoods based on race—and reverse redlining, which is flooding minority neighborhoods with predatory mortgage products. Foreclosures that resulted from those practices, the lawsuits contend, continue to diminish L.A.’s property tax revenues and increase the demand for city services.
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