The Consumer Financial Protection Bureau filed a lawsuit against a Chicago-based mortgage lender for allegedly discouraging Black applicants from applying for loans while engaging in redlining by discouraging borrowers for investing in predominantly African-American neighborhoods.
The CFPB alleges Townstone “drew almost no applications for properties in African-American neighborhoods” in the Chicago metropolitan area between 2014 and 2017, while processing few applications from potential Black borrowers in the Chicago area.
Specifically, the complaint – filed in federal court in the Northern District of Illinois – alleges:
- 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 are 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 area, including by making discouraging statements during its weekly radio shows and podcasts through which it marketed its services.
The Bureau’s complaint seeks an injunction against Townstone, as well as damages, redress to consumers, and the imposition of a civil money penalty.
Touchstone, which has a picture of a multiracial family on the front of its website, referred questions to its law firm, which did not respond to a request for comment.
A copy of the complaint can be found here.