ATLANTA — Three Atlanta-area counties have filed a lawsuit asserting that British bank HSBC cost them hundreds of millions of dollars in extra expenses and damage to their tax bases by aggressively signing minorities to housing loans that were likely to fail.
The Georgia counties’ failure or success with the relatively novel strategy could help determine whether other local governments try to hold big banks accountable for losses in tax revenue based on what they say are discriminatory or predatory lending practices.
Similar lawsuits resulted in settlements this year worth millions of dollars for communities in Maryland and Tennessee.
Fulton, DeKalb, and Cobb counties say in their lawsuit, which was filed in October, that the housing foreclosure crisis was the ‘‘foreseeable and inevitable result’’ of big banks, such as HSBC and its American subsidiaries, aggressively pushing irresponsible loans or loans that were destined to fail.
The counties say that crisis has caused them tremendous damage.
‘‘It’s not only the personal damage that was done to people in our communities,’’ said DeKalb County Commissioner Jeff Rader.
“That has a ripple effect on our tax digest and the demand for public services in these areas,’’ he said.
The lawsuit says the banks violated the Fair Housing Act, which provides protections against housing or renting policies or practices, including lending, that discriminate on the basis race, color, national origin, religion, sex, family status, or handicap.
The counties say their tax digests — which represent the value of all property subject to tax — have declined from a high point in 2009.
Fulton’s tax digest has dropped about 12 percent, from $32.7 billion to $28.7 billion; DeKalb’s has dropped about 20 percent, from $22 billion to $17.5 billion; and Cobb’s has dropped about 15 percent, from $25.5 billion to $21.3 billion, the lawsuit says.
That reduces their ability to provide critical services in their communities, the lawsuit says.
In addition to reducing tax income, vacant or abandoned homes that are in or near foreclosure create additional costs for the counties, the lawsuit says.