Cleveland officials accused some of the nation's biggest banks of creating a public nuisance through blight. Baltimore and Birmingham, Ala., filed suits alleging the same players created an epidemic of foreclosures by violating the Fair Housing Act. Buffalo, meanwhile, just wants $16,000 for demolishing each of 57 blighted homes from which it claims banks walked away.

So far, the first two approaches have failed: The Cleveland and Birmingham cases were dismissed last year, and a U.S. District Court judge in Baltimore dismissed the city's case Wednesday. This is hardly the end of the litigation: Cleveland intends to appeal; Baltimore's city attorney is already planning an amended complaint; and the city of Memphis filed a similar suit against Wells Fargo & Co. last week. But banking defense attorneys are hoping the Baltimore ruling will at least discourage further municipalities from trying their luck.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.