CFPB Seeks to Void Settlement in Townstone 'Redlining' Case, Citing Misconduct

The Trump administration's CFPB moves to overturn a 2024 settlement, alleging partisan bias and procedural flaws in the original investigation.

The CFPB has filed a motion to vacate its 2024 settlement with Townstone Financial, aiming to return the $105,000 penalty paid by the small mortgage lender.
The case against Townstone was based on allegations of 'redlining' and racial discrimination in marketing, which the company has consistently denied.
Internal records reviewed by CFPB advisor Dan Bishop revealed alleged animus toward Townstone's political viewpoints and procedural misconduct during the investigation.
The CFPB's initial enforcement actions included race-conscious remedies, raising questions about their legality under recent Supreme Court rulings advocating race-neutral approaches.
The motion reflects broader concerns about partisan enforcement within federal agencies and the balance between civil rights enforcement and First Amendment protections.