CFPB seeks to un-do lawsuit against small mortgage firm: CEI statement
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The Consumer Financial Protection Bureau this week took the unusual step of requesting to vacate a lawsuit and settlement penalizing a small Chicago-based mortgage firm. CEI experts have long spotlighted this case as one of the CFPB’s worst abuses and today praised the CFPB decision.
Statement by John Berlau, CEI director of finance policy:
“The CFPB under the leadership of Acting Director Russ Vought should be commended for seeking to vacate the lawsuit against the small mortgage firm Townstone Financial and return the unjust penalty of $105,000 that the CFPB had levied against the company.
“The CFPB charged Townstone with violating anti-discrimination laws simply for speaking frankly about crime in Chicago neighborhoods as expressed on the firm’s radio show and podcast. As my colleague Stone Washington and I pointed out in the Wall Street Journal and Washington Examiner, the fears expressed by Townstone associates about Chicago crime were essentially no different than concerns articulated by the city’s progressive mayor Brandon Johnson. The CFPB’s enforcement action threatened to set a terrible precedent with the potential to curb First Amendment activity, as it would have meant that any opinion a financial professional expressed on a podcast or social media venue could be subject to CFPB punishment.
“The CFPB is right to seek to vacate the case and refund the penalty, as we recommended in the Washington Examiner, and we now urge the courts to swiftly grant this request.”
Statement by Stone Washington, CEI research fellow:
“Vacating the lawsuit against Townstone Financial would right the wrongs of the agency’s unwarranted censorship campaign. For too long, the CFPB sought to surveil and punish firms like Townstone based on specious claims of redlining. From its wanted list, the CFPB singled out Townstone for CEO Barry Sturner’s constitutionally protected speech expressed on his radio show. For the CFPB, it suddenly becomes illegal for Sturner to voice legitimate concerns about rampant crime in certain neighborhoods in Chicago, sentiments that many people, including Chicago Mayor Brandon Johnson, have openly shared.
“Writing for the WSJ and Washington Examiner, my colleague John Berlau and I exposed the CFPB’s censorship crusade, demonstrating that Townstone was wrongfully targeted by the Bureau for his protected speech. The CFPB never acted on actual complaints against Sturner or his company but, rather, weaponized his own words against him to make an example. Left unchecked, that CFPB action would have set a dangerous precedent to potentially silence speech disfavored by regulators. We hope the courts will grant Acting Director Vought’s request to vacate the case.”
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