WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement on today’s decision in CFPB v. Townstone Financial, Inc., No. 1:20-cv-04176 (N.D. Ill.):

“The court’s decision is a thorough, well-reasoned, and decisive rejection of a shameful effort by the Consumer Financial Protection Bureau, in league with an allegedly racist mortgage broker, to nullify a settlement entered years ago.  As Better Markets and its fellow amici argued to the court in a brief led by the National Fair Housing Alliance, if granted, the CFPB’s motion would undermine the law and send a clear signal that Trump’s CFPB will ludicrously claim that the right of free speech allows race discrimination.

“The court got it right from start to finish.  First, it rejected the parties’ claim that the rule governing such motions for relief from judgment should be relaxed, holding that they must still show extraordinary circumstances.  It relied in part on the Supreme Court’s recent holding reaffirming this stringent standard.  Next it rejected the parties’ arguments focused on the original basis for the enforcement action and the notion that the First Amendment protected the discriminatory speech at issue.  As the court said, the CFPB’s about face on the basis for the action was ‘an act of legal hara-kiri that would make a samurai blush.’

“Finally, and in the end, the court rested on the enormous threat to the finality of judgments that the parties’ motion represented.  As the Amicus brief pointed out, the motion would severely erode public confidence in the finality of judgments. In the concluding words of the court, it ‘would set a precedent suggesting that a new administration could seek to vacate or otherwise nullify the voluntary resolution of a case between a prior administration (or the same administration, but under different agency leadership) and a private party merely because its leadership thought the original litigation unwise or improperly motivated. That is a Pandora’s box the Court refuses to open.’”

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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.