A federal court judge ruled against the City of Cleveland and Mayor Frank Jackson in a suit against some large investment banks the mayor believes were to blame for the city’s subprime lending and foreclosure crisis.
In her 36-page decision, U.S. District Judge Sara Lioi ruled that the city’s public nuisance complaint was pre-empted by a section of Ohio law that does not allow municipalities to regulate lending practices. Jackson filed the suit back in January 2008 alleging that Wall Street firms like Goldman Sachs and Deutche Bank irresponsibly bought and sold high interest home loans.
The city has appealed the ruling. The suit was seen as unique, basing its complaint on grounds of public nuisance, and because it targeted investment banks instead of mortgage brokers.
Source: Cleveland.com