Landmark Decision Strengthens Anti-Discrimination Laws
In a landmark victory for the Consumer Financial Protection Bureau (CFPB), a federal court has ruled that Townstone Mortgage Company engaged in illegal redlining practices by denying mortgages to qualified Black and Hispanic homebuyers.
The Case
The CFPB filed suit against Townstone in 2019, alleging that the company had violated the Fair Housing Act by redlining—the illegal practice of refusing to lend to certain neighborhoods based on race or ethnicity.
The evidence presented at trial showed that Townstone:
- Denied mortgages to qualified Black and Hispanic applicants at a significantly higher rate than to White applicants.
- Used racially discriminatory underwriting criteria, such as requiring higher down payments and credit scores for Black and Hispanic borrowers.
- Avoided lending in predominantly Black and Hispanic neighborhoods.
Findings and Remedies
The court ruled that Townstone had engaged in intentional redlining, finding that the company’s discriminatory practices were willful, pervasive, and systematic.
The court ordered Townstone to pay:
- $100 million in damages to affected borrowers
- $25 million in civil penalties
- To overhaul its lending practices to ensure fair treatment for all borrowers
Significance
The CFPB’s victory in the Townstone case is a major step forward in the fight against housing discrimination.
It sends a clear message that redlining is illegal and will not be tolerated. It also strengthens the CFPB’s enforcement powers and provides victims of redlining with a path to justice.
Moving Forward
The CFPB is committed to continuing to combat redlining and other forms of housing discrimination.
The agency encourages homeowners who believe they have been victims of redlining to file a complaint with the CFPB or contact their local fair housing agency.
Consumers and lenders alike should be aware of their rights and responsibilities under the Fair Housing Act.
By working together, we can ensure that everyone has equal access to fair and affordable housing.
Kind regards J. Ross
