The Consumer Financial Protection Bureau (CFPB) asked the U.S. District Court for the Northern District of Illinois – Eastern Division to vacate the settlement in CFPB v. Townstone Financial, Inc., et al., which resolved allegations of redlining and violations of the Equal Credit Opportunity Act (ECOA) against the Chicago mortgage broker owned by Barry Sturner.
Office of Management and Budget (OMB) Deputy Director Dan Bishop, who has been assigned to the CFPB, filed a declaration in support of a joint motion for relief from and vacation of the settlement.
“The documents I reviewed make clear that the CFPB lacked a sufficient factual predicate for the seven-year saga to which it subjected Defendant Townstone,” Bishop wrote in the declaration. “Those documents also make clear that agency lawyers misled their superiors in enforcement decisions and were affected by animus publicly toward the publicly expressed viewpoints of Townstone’s owner.
“Considering the record and the revelations in this declaration, the CFPB supports vacating the consent judgment, dismissing the claims and permitting the agency to return to Townstone the civil penalty Townstone paid.”
Under the settlement, Townstone agreed to pay $105,000 to the bureau.
Sterbcow Law Group Managing Attorney Marx Sterbcow, who was one of the attorneys who represented Townstone, posted on LinkedIn that the filing “exposes a stark truth: the agency targeted Townstone not for discrimination, but for its constitutionally protected speech. The result was catastrophic, shuttering a small, family-run mortgage lender. As counsel, we have long challenged the CFPB’s actions here. Today’s filings validate those concerns.”
Check back for more on this developing story.
The Title Report has been following the Townstone case since the story broke in 2019. You can read our previous coverage here:
Judge dismisses CFPB redlining case against Townstone Financial
CFPB: First Amendment does not protect discrimination
Does CFPB enforcement action violate First Amendment?
Townstone owner accused of fraudulent money transfers
Townstone owner ‘shocked’ by CFPB action
Townstone responds to CFPB lawsuit
A year later, CFPB cites Townstone for ECOA violations
Mortgage company owner confirms identity in CFPB investigation
CFPB on verge of industry-changing lawsuit