CFPB, Townstone Seek to Vacate Redlining Settlement Amid Misconduct Claims
CFPB, Townstone Seek to Vacate Redlining Settlement Amid Misconduct Claims

CFPB, Townstone Seek to Vacate Redlining Settlement Amid Misconduct Claims

News summary

The Consumer Financial Protection Bureau (CFPB) has requested a federal judge to vacate a settlement with Townstone Financial, a Chicago mortgage lender accused of redlining. CFPB Acting Director Russell Vought claimed the bureau abused its power and used unfounded 'equity' arguments in its investigation, asserting that the agency failed to consider Townstone's First Amendment rights. This case, initiated under the Trump administration, has faced scrutiny as CFPB officials allege misconduct in the agency's approach, including misleading enforcement actions. The CFPB's motion to vacate comes after internal reviews indicated a lack of sufficient evidence against Townstone and its president, Barry Sturner, whose remarks on a radio show were cited as discouraging to Black applicants. Critics argue that these actions reflect a misuse of regulatory authority aimed at enforcing diversity, equity, and inclusion in lending practices. The CFPB's shift in stance is part of a broader reevaluation of cases initiated under previous leadership, with multiple lawsuits being dismissed.

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