A federal judge in Chicago on Thursday refused to allow the U.S. Consumer Financial Protection Bureau to vacate a
racial discrimination settlement reached last year with a mortgage lender, finding there was no basis for granting an extraordinary request.
The decision marked a setback after senior Trump administration officials claimed in March that they were see
king redress for a company, Townstone Financial, they said had been baselessly “persecuted” without evidence.
The CFPB originally brought the case in 2020 during Donald Tru
mp’s first presidency, accusing Townstone of “redlining” by discou
g for mortgages through derogatory and disparaging comments in promotional materials.
U.S. District Judge Franklin Valderrama cast doubt on CFPB cla
ims that there had been no evidence underlying the CFPB’s original case and said the courts had
not addressed the question prior to the settlement.
Reversing a prior CFPB action in this way, he said, amounted to “an act of legal hara-kiri that would make a samurai blush.”
“At bottom, to grant the motion based on the arguments advan
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ced by the parties would be to undermine the finality of judgments,” Valderrama said. “That is a Pandora’s box the court refuses to open.”
Representatives for the CFPB did not respond to a request for comment.
However Steve Simpson, a lawyer for Townstone, which jointly filed
the motion with the CFPB, maintained that the court had not considered the agency’s lack of evidence.
He said Townstone was considering its next steps and hoped that the U.S. Congress would “take a closer look at the case.”