Two separate lawsuits accusing Wells Fargo & Co. of engaging in predatory lending and violating the federal Fair Housing Act have been dismissed.

The lawsuits accused Wells Fargo of steering black and Hispanic borrowers into higher-cost loans, a process sometimes called "reverse redlining”. The lawsuits, filed by the city of Los Angeles and by Cook County, Ill., which includes Chicago, said Wells Fargo’s actions resulted in higher foreclosures and lower property tax collections. 

Los Angeles and Chicago are the second- and third-most populous U.S. cities. Several other large cities and counties - such as Baltimore, Cleveland, Memphis and Miami - have accused banks of biased mortgage lending that prolonged the nation's housing crisis. 

In the Chicago case, U.S. District Judge Gary Feinerman said Congress did not authorize entities such as Cook County to pursue an FHA claim. He said his decision did not mean that Wells Fargo complied with the FHA, or that "direct victims" of alleged abusive lending did not deserve compensation.

The county "alleges neither that it was denied a loan nor offered unfavorable terms - setting aside the obvious point that Cook County is not alleged to have a race or other protected trait," Feinerman wrote. The Cook County State's Attorney's Office said it is reviewing Feinerman's ruling.

In the Los Angeles case, the city accused Wells Fargo of discriminatory lending dating to 2004. But U.S. District Judge Otis Wright found no showing of FHA violations within the two-year statute of limitations period before the December 2013 lawsuit.

Wright faulted Los Angeles's litigation strategy, stating that the city failed to identify any Wells Fargo policy to steer minorities into costly loans. Instead, he said, the city objected to the bank's issuance of federally-insured loans that can help lower-income borrowers afford homes, despite their higher costs.

"In the name of advocating on behalf of minority borrowers, the city decided to fight for an outcome that would hurt those same borrowers," Wright wrote. "That decision is disheartening."

The office of Los Angeles City Attorney Mike Feuer did not immediately respond to requests for comment on Wright's decision. 

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