On July 15, 2020, the CFPB filed suit against Towstone Financial, Inc (a nonbank retail-mortgage creditor based in Chicago) for fair lending violations. The CFPB’s complaint alleges that Townstone violated ECOA and Regulation B by engaging in discriminatory mortgage-lending practices. According to the CFPB’s release:
“As alleged in the complaint, from 2014 through 2017, Townstone drew almost no applications for properties in African-American neighborhoods located in the Chicago-Naperville-Elgin Metropolitan Statistical Area (Chicago MSA) and few applications from African Americans throughout the Chicago MSA. The Bureau’s complaint, filed in federal district court in the Northern District of Illinois, alleges that:
Townstone engaged in acts or practices, including making statements during its weekly radio shows and podcasts through which it marketed its services, that illegally discouraged prospective African-American applicants from applying to Townstone for mortgage loans;
Townstone engaged in illegal redlining by engaging in acts or practices that discouraged prospective applicants living in African-American neighborhoods in the Chicago MSA from applying to Townstone for mortgage loans, including by making discouraging statements during its weekly radio shows and podcasts through which it marketed its services; and
Townstone engaged in illegal redlining by engaging in acts or practices that discouraged prospective applicants living in other areas from applying to Townstone for mortgage loans for properties located in African-American neighborhoods in the Chicago MSA, including by making discouraging statements during its weekly radio shows and podcasts through which it marketed its services.”
The full complaint can be found here.