Bank of America must face Chicago-area predatory lending lawsuit

(Reuters) – A federal judge rejected Bank of America Corp’s request to dismiss a lawsuit in which Cook County, Illinois, accused the lender of targeting black and Hispanic borrowers in the Chicago area with subprime mortgages.

In a decision dated Thursday, U.S. District Judge Elaine Bucklo in Chicago said Cook County could pursue allegations that the bank steered minority borrowers into an outsized number of high-cost home loans, resulting in more foreclosures, lower property taxes and greater urban blight.

“The county has asserted an adequate injury-in-fact that is plausibly connected to defendants’ alleged discriminatory lending,” Bucklo wrote. She did not rule on the case’s merits.

Cook County, the nation’s second most populous county after Los Angeles, had accused Bank of America of “reverse redlining,” in which credit is often extended on unfair terms in specific geographic areas based on borrowers’ race, ethnicity or income.

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