CUNA, NAFCU, Banking Trade Groups Join Forces in Supreme Court Brief

Even as the credit union industry and the nation’s banks continue to clobber each other, NCUA and NAFCU are supporting Bank of America and Wells Fargo in trying to convince the Supreme Court to accept a housing discrimination case against the banks.

The city of Miami filed suit against both banks, alleging that discriminatory actions against the city’s residents harmed the municipality. The city said that foreclosures and other events stemming from unfavorable mortgages resulted in lost revenue from lower property taxes and other expenses.

CUNA and NAFCU joined several other trade groups in filing an amicus brief in the combined cases last week, contending that there are other ways for those hurt by discrimination to litigate their complaints.

At the same time, the trade groups, such as the Independent Community Bankers of America, are engaged with NAFCU and CUNA in a high-profile lobbying battle over the credit union tax exemption.

The groups said that that several municipalities have filed similar discrimination suits.

“The massive wave of litigation under the FHA—brought by private lawyers on behalf of municipalities—will impose potentially enormous costs on lenders without significantly advancing the goals of the FHA,” they argued.

Without the Supreme Court’s intervention, the groups warn, other cities are likely to sue financial institutions.

When the Supreme Court originally heard the case, they overturned an appeals court ruling in favor of the banks and sent the case back to the appellate court.

The banks, in asking the Supreme Court to accept the case, said the 11th Circuit Court of Appeals still issued an order similar to its original one.

“The Eleventh Circuit’s defiance of this Court’s holdings is troubling enough on its own,” the banks said, adding that the appeals court ruling resulted in a split among judicial circuits.