(Reuters) – The highest U.S. client monetary watchdog company on Friday stated it had reached a settlement in a long-running lawsuit with a Chicago mortgage lender over alleged racial discrimination.
Underneath the phrases of the proposed settlement, Townstone Monetary would pay a $105,000 effective into the U.S. Client Monetary Safety Bureau’s victims aid fund.
In a press release on its web site, the Pacific Authorized Basis, which represented Townstone, stated the corporate neither admitted nor denied the allegations and settled resulting from authorities’s superior authorized sources. “This case ought to by no means have been introduced,” lawyer Steve Simpson stated.
WHY IT MATTERS
The CFPB says the enforcement motion follows the company’s July authorized victory earlier than the U.S. Seventh Circuit Courtroom of Appeals, which gave it new freedom to battle racial discrimination not solely in lending but additionally in advertising of loans. It’s the company’s second motion on racial bias within the mortgage business in lower than three weeks.
KEY QUOTE
“The CFPB’s lawsuit in opposition to Townstone Monetary included a significant appellate court docket victory that makes clear that persons are shielded from unlawful redlining even earlier than they submit their utility,” CFPB Director Rohit Chopra stated in a press release.
CONTEXT
In 2020, the CFPB accused Townstone Monetary of discouraging Black folks from making use of for mortgages and avoiding the credit score wants of African American neighborhoods within the Chicago space. In weekly advertising radio exhibits and podcasts, the corporate allegedly disparaged predominantly Black neighborhoods as crime ridden and the “jungle.”
