From Yahoo Finance: 2025-03-26 19:50:00

The Consumer Financial Protection Bureau is seeking to undo a settlement with Townstone Financial, accusing prior officials of abusing power to enforce diversity, equity, and inclusion in lending. The CFPB won a settlement in November over racial discrimination allegations. The agency is also seeking to return a $105,000 penalty to Townstone.

CFPB workers and consumer advocates are fighting against the Trump administration’s efforts to neutralize the agency. The settlement with Townstone followed a legal victory for the CFPB in pursuing claims of racial discrimination in mortgage marketing. The agency’s first case against a non-bank mortgage lender was upheld by an appeals court.

The CFPB and Townstone filed a joint motion in federal court, claiming the agency’s case was based on a faulty investigation and should never have been brought. A sworn declaration by an advisor detailed to the CFPB alleged that agency lawyers misled superiors in enforcement decisions and had animus toward Townstone. Townstone was accused of redlining in 2020.

Kathy Kraninger and Thomas Ward, former CFPB officials, did not respond to requests for comment. The current administration conducted an investigation and agreed to file a joint motion in the case. The CFPB and Townstone jointly stated that the case was based on a faulty investigation.



Read more at Yahoo Finance: US consumer agency seeks to vacate discrimination case it had already won