The agency says its case against Townstone Mortgage was 'abusive, unjust'
Time seems to be running backwards at theConsumer Financial Protection Bureau (CFPB). The agency is going back in time, dismissing pending cases and even seeking to vacate cases that have already been settled. Case in point: Townstone Mortgage.
Key Points
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The CFPBhas asked a court to reverse a2023 settlementit won against a mortgage lender accused of racial discrimination.
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The agency now claims the case wasbased on a flawed investigationand driven bymisused enforcement powers.
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The CFPB wants toreturn the $105,000 fineit collected from Townstone Financial.
Details
In a rare legal reversal, theConsumer Financial Protection Bureau (CFPB)has filed a motion asking a federal court tovoid a previous enforcement actionthe agency successfully pursued againstTownstone Financial, a Chicago-based mortgage lender accused of discriminatory marketing practices.
The case, which dates back to a 2020 complaint filed during President Trumps first administration, alleged that Townstonediscouraged Black mortgage applicantsthrough its marketing and public statements a practice known asredlining.The company strongly denied the charges.
InNovember 2023, the CFPB reached a$105,000 settlementwith Townstone following a court victory that had upheld the agencys right to regulate how lenders market mortgages. It marked the first time the CFPB had brought a redlining case against anon-bank lender.
"DEI agenda"
However, current CFPB leadership, includingActing Director Russ Vought, is now condemning the agencys earlier actions.
The CFPB abused its power, used radical equity arguments to tag Townstone as racist with zero evidence, and spent years persecuting them all to further a DEI agenda, Vought said in a statement.
In ajoint filing with Townstone, the CFPB asked the court to throw out the settlement and reverse the penalties, stating that the agencys earlier actions werebased on a faulty investigationandmisrepresentations by staff attorneys.
A sworn declaration fromDan Bishop, a White House budget advisor currently assigned to the CFPB, claimed that agency lawyersmisled leadershipand acted withbias against Townstone.
ThePacific Legal Foundation, which represented Townstone, said, We are glad the current administration conducted an investigation and agreed to file a joint motion in this case.
The case now awaits a federal court's decision on whether to formally vacate the settlement.
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Posted: 2025-03-28 17:25:35
