Los Angeles Sues U.S. Bancorp for Being ‘Slumlord’

City accuses the bank of letting hundreds of foreclosed homes deteriorate

   

Los Angeles Sues U.S. Bancorp for Being ‘Slumlord’

This week has brought both good and bad news to U.S. Bancorp (NYSE:USB). The financial giant reported solid revenue growth Wednesday, but was slapped with a lawsuit earlier in the week.

Los Angeles filed a civil lawsuit against the bank Monday accusing a U.S. Bancorp unit of being a slumlord. The lawsuit alleges that the bank has allowed hundreds of foreclosed homes to become inhabitable, Reuters reports. The city is pursuing a civil fine of $2,500 a day for each violation and expects the amount could add up to well over $100 million.

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“This lawsuit is a deterrent,” Los Angeles City Attorney Carmen Trutanich told reporters yesterday.  “It’s a message to other banks; step up and do the right thing.”

This isn’t the first time Trutanich has led a lawsuit against a bank the city refers to as a “slumlord.” In 2011, LA alleged that Germany’s Deutsche Bank (NYSE:DB) allowed some of its Los Angeles properties to deteriorate.

U.S. Bancorp spokesman Thomas Joyce told Reuters that mortgage servicers and not the bank — which actually serves as the trustee of the mortgages — is responsible for the upkeep of foreclosed properties.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/los-angeles-sues-u-s-bancorp-for-being-slumlord/.

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