Some of the cities hardest hit by the sub-prime mortgage crisis are fighting back with lawsuits against the banks whose lending fueled the collapse of the housing market. Most recently, the city of Miami filed three separate suits against Wells Fargo, Bank of America, and Citigroup, claiming their lending practices violated the federal Fair Housing Act and cost the city millions in tax revenue.

The cases, all of which were filed in the Southern District of Florida, focus on the banks’ treatment of minority borrowers. According to the city, minority residents were routinely charged higher interest rates and fees than white loan applicants, regardless of their credit history. They were also stuck with other onerous terms-such as prepayment penalties, adjustable interest rates, and balloon payments-that increased their odds of falling into foreclosure.

It’s no secret that some big banks discriminated against minority borrowers during the housing bubble. Racial bias ran so deep inside Wells Fargo’s mortgage division that employees regularly referred to subprime mortgages as ‘ghetto loans’ and African American borrowers as ‘mud people,’ according to testimony from former bank officials. In 2011, Bank of America paid $355 million to settle a Justice Department lawsuit, charging that its Countrywide Financial unit steered […]