Consumer Bureau Seeks to Undo Settlement and Repay Mortgage Lender

Under President Trump, the Consumer Financial Protection Bureau has dropped nearly a dozen enforcement cases brought during the Biden administration, ending lawsuits against banks and lenders for a variety of financial practices that the watchdog agency no longer considers illegal.But on Wednesday, the bureau went a step further: It is seeking to give back $105,000 that a mortgage lender paid to settle racial discrimination claims last fall.In an especially strange twist, the case — against Townstone Financial, a small Chicago-based lender — was brought during Mr.Trump’s first term by Kathleen Kraninger, the director he appointed to run the consumer bureau.Russell Vought, who became the agency’s acting director last month, said it had “used radical ‘equity’ arguments to tag Townstone as racist with zero evidence, and spent years persecuting and extorting them.”In its filing asking the U.S.

District Court for the Northern District of Illinois to set aside the settlement it approved in November, the bureau said it had found “significant undisclosed problems” in its handling of the lawsuit, which the new leadership called an “unmerited” complaint that violated the defendants’ First Amendment free-speech rights.The case began in 2020 when the consumer bureau accused Townstone of redlining and breaking fair-lending laws by discouraging residents living in majority-Black neighborhoods from applying for its housing loans.It homed in on comments made during the company’s radio show and podcast, “The Townstone Financial Show,” saying they were intended to rebuff Black borrowers or those seeking to buy homes in certain neighborhoods.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

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