Los Angeles Sues US Bancorp
The city of Los Angeles fired a shot across the bow of big banks today. In response to US Bancorp’s lack of upkeep on its 1,500 foreclosed properties in the city, City Attorney Carmen Trutanich announced today that LA will sue, calling on banks to “step up and do the right thing" for the community. From Reuters:
In its complaint, Los Angeles said that at least since July 2008, U.S. Bank has "disregarded virtually every one of its legal duties and responsibilities as owner, resulting in the creation and maintenance of an alarming number of vacant nuisance properties and substandard occupied housing units."
It said the bank ignored repeated demands that it comply with the law, causing hundreds of homes to become uninhabitable or "public nuisances" and resulting in illegal evictions of hundreds of tenants from the second most-populous U.S. city.
Los Angeles said it is seeking a civil fine of $2,500 a day for each violation by what it called "one of the largest slumlords in the city." It estimated potential liability in the "hundreds of millions of dollars."
Trutanich went on to threaten similar action to other banks, should they also not act to deal with their foreclosed properties.
Banks often get away with their malfeasance, or standard operating procedure, profit at nearly any cost, by virtue of how difficult it is for ordinary people to comprehend manipulation of interest rates or the dangers of money market funds. Urban blight, however, is readily apparent. As they see houses in their own neighborhoods empty and falling into disrepair, ordinary people are demanding action. Other cities should look to LA's example.