Baltimore Sues Bank for Lost Tax Revenue Due to Foreclosures
A lawsuit contends Wells Fargo Bank has cost the city of Baltimore needed tax revenues through subprime lending practices that led to increased foreclosures.
The New York Times reports that other city lawsuits have tried to hold banks responsible for properties abandoned as the result of foreclosures, but this suit is apparently the first to cite reduced tax revenues.
The suit filed by the Baltimore City Council and Mayor Sheila Dixon contends the city has lost tax revenue at the same time it has had to increase fire and police protection in affected neighborhoods.
The city is asking a court to bar the bank from charging higher fees to black borrowers, the newspaper says. In 2006, Wells Fargo charged 65 percent of blacks’ and only 15 percent of whites’ interest rates that were 3 percentage points above a federal benchmark, according to the suit.
A spokesman said the bank does not discriminate illegally.
