RSSThe Consumer Financial Protection Bureau recently vacated its $105,000 settlement with Townstone Financial and ordered the company to be refunded after finding the bureau had engaged in misconduct by targeting the mortgage lender’s free speech protections.
CFPB Chief Legal Officer Mark Paoletta and attorneys for Townstone issued a joint motion for relief March 26 in the U.S. District Court for the Northern District of Illinois.
CFPB Acting Director Russ Vought heavily criticized its own 2020 settlement reached under Trump-appointed CFPB Director Kathy Kraninger, saying it was “extracted from Townstone after a seven-year harassment saga,” with screening based on an arbitrary number of mortgages.
“CFPB abused its power, used radical ‘equity’ arguments to tag Townstone as racist with zero evidence, and spent years persecuting and extorting them — all to further the goal of mandating DEI in lending via their regulation-by-enforcement tactics,” Vought said. “The more we uncover at CFPB, the more we see how this agency was weaponized against targeted Americans.”
Townstone Financial allegedly illegally discouraged potential African-American applicants from applying for mortgage loans during its Chicago-based weekly, one-hour AM radio call-in show:
- Townstone CEO Barry Sturner allegedly made racist statements in 2017 when referring to a now-replaced grocery store in downtown Chicago that was once part of the Jewel-Osco grocery store chain.
- In the summer of 2016, Townstone’s CEO said the south side of the city becomes a “hoodlum weekend” on the weekends, with the police the only protection against it becoming a war zone.
Vought said the CFPB used a “redlining screen” that caught 22,000 companies, narrowing the list down to a few without properly explaining the process. The bureau alleged Townstone was targeted because of the small size of its firm and its hosting of the conservative-leaning radio show.
Vought said there is no evidence of potential customers reporting Townstone to the bureau or finding the company offensive.
“This was a flagrant misuse of government resources to destroy a small business that did nothing wrong,” added CFPB Senior Advisor Dan Bishop. “For the crime of protected political speech, this firm was targeted and harassed for years by this rogue agency. We are righting this wrong and protecting the First Amendment.”
