Mayor sues NY banks over subprime crisis

CLEVELAND, Jan. 11 (UPI) -- Cleveland Mayor Frank G. Jackson is suing Wall Street over the U.S. economy-threatening subprime lending crisis.

Jackson, a Democrat, filed his suit against 21 banks in Cuyahoga County Common Pleas Court, naming venerable institutions such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo for creating a public nuisance.

The mayor contends the companies irresponsibly bought and sold high-interest home loans to people who had "no realistic means of keeping up with their loan payments," resulting in widespread defaults that depleted the city's tax base and left entire neighborhoods in ruins, the Cleveland Plain-Dealer reported.

City officials hope to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent tearing down or boarding up thousands of abandoned houses.

"To me, this is no different than organized crime or drugs," Jackson said in an interview with Plain Dealer reporters and editors. "It has the same effect as drug activity in neighborhoods. It's a form of organized crime that happens to be legal in many respects."