by Angela Nazworth | July 18, 2012 11:25 am
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.
“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.
Source URL: http://investorplace.com/2012/07/los-angeles-sues-u-s-bancorp-for-being-slumlord/
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