The Consumer Financial Protection Bureau announced it will vacate an existing settlement with the Chicago-based lender Townstone Financial over alleged redlining, with the bureau’s leadership saying regulators targeted the lender despite no evidence showing actual discrimination.
In a statement, CFPB leadership said the bureau’s case against Townstone was not driven by any act of discriminatory conduct, “but solely on perceived racial disparities in mortgage application and origination statistics” based on a computer model “run by DEI-driven CFPB bureaucrats.” They also said the lender was targeted for comments on a radio program in which the company’s CEO made statements about crime in Chicago’s majority Black neighborhoods.
Townstone agreed to pay $105,000 to settle the CFPB’s discrimination case. The bureau plans to return the money.
“This was a flagrant misuse of government resources to destroy a small business that did nothing wrong,” CFPB Senior Advisor Dan Bishop said.
