WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the filing of an amicus brief, led by the National Fair Housing Alliance and joined by Better Markets and other consumer advocacy groups, in CFPB v. Townstone Financial, Inc., No. 1:20-cv-04176 (N.D. Ill.):
“The new leadership at the CFPB is attempting to retroactively bless claims of blatant race discrimination by a mortgage broker. In an abrupt reversal in a fair lending discrimination case settled last fall, the agency now seeks to nullify the settlement. As the amicus brief explains, this about-face has no basis in the law or the facts. The court should not allow the agency to walk away from its enforcement action—which was brought during the first Trump Administration, aggressively litigated, and willingly settled—simply because the new administration has decided it doesn’t want to enforce the laws against discrimination in the lending markets.
“The CFPB brought this enforcement action in 2020 to address apparent efforts by a Chicago-based mortgage broker, Townstone Financial, to discourage African-Americans from seeking mortgage loans, in part through allegedly racist remarks broadcast on the company’s radio show. The case was tenaciously litigated, even reaching the Seventh Circuit Court of Appeals, which affirmed the CFPB’s interpretation of the Equal Credit Opportunity Act. It culminated in a settlement in November of 2024, which included a civil penalty. Yet after the second Trump administration was installed and issued its executive order requiring agencies to ferret out cases involving ‘censorship’ or ‘political’ motivations, the CFPB joined with the defendant and petitioned the court to vacate or nullify the settlement.
“The parties insinuate that the original case lacked a solid evidentiary basis and that staff committed improprieties during the investigation. They also claim that the racist statements cited in the complaint constitute protected speech under the First Amendment. But as the amicus brief explains, neither claim has any basis in the facts or the law governing motions for relief from judgments under Federal Rule of Civil Procedure 60(b). The brief also explains that granting the parties’ motion will unleash a wave of attempts to nullify prior, final settlements; incentivize politically motivated law enforcement decisions; force parties to claw back previously paid fines, even after years have elapsed; and further burden the already overworked federal courts. The public will be harmed, and the court should say no.”
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