Ninth Circuit Affirms Dismissal of Wells Fargo FHA Suit

Munger, Tolles & Olson obtained affirmation of summary judgment in the U.S. Court of Appeals for the Ninth Circuit on behalf of Wells Fargo in a lawsuit brought by the City Attorney of Los Angeles alleging the bank engaged in discriminatory and predatory mortgage lending practices targeting minority borrowers in violation of the Fair Housing Act.

The City of Los Angeles filed its lawsuit against Wells Fargo in 2013, accusing the bank of steering minority borrowers into subprime or other allegedly “predatory” loans. The city claimed that these loans resulted in vast numbers of foreclosures, decreased tax revenue to the city and increased demand for government services.

Wells Fargo originally obtained summary judgment in the U.S. District Court for the Central District of California in July 2015.

On May 26, 2017, the Ninth Circuit affirmed the lower court’s decision, ruling that the city had failed to “show a discriminatory loan during limitations period” and failed to establish a “robust” cause and effect link between the bank’s practices and the alleged harmful effects.

The Wells Fargo defense team included Terry E. Sanchez, Daniel P. Collins and Joshua Patashnik.