![]() Made no effort to market to African-Americans.In terms of the standard allegations, the complaint asserts that during the relevant period Townstone: The complaint makes a number of standard allegations for a redlining complaint, but also includes a unique element regarding public statements the CFPB asserts were made by Townstone’s principals that may have prompted the CFPB to select Townstone as the test case for a redlining claim against a non-bank mortgage lender. And yet the CFPB has never issued guidance regarding how it would assess a non-bank mortgage lender for redlining purposes. Despite the substantial differences between banks and non-banks, including without limitation that banks are subject to the Community Reinvestment Act and can make loans for retention in portfolio, the CFPB for years has been exploring the potential of bringing a redlining complaint against a non-bank mortgage lender. The DOJ, HUD and CFPB have made redlining claims, and entered into settlements, with banks under the ECOA and the FHA. The CFPB refers to majority and high-majority African-American neighborhoods as neighborhoods that are more than 50% and more than 80% Black or African-American, respectively. The complaint in general asserts that during the period of Januthrough Decem(the “relevant period”), Townstone, which principally lent in the Chicago Metropolitan Statistical Area (MSA) during the relevant period, redlined majority and high-majority African-American neighborhoods in the Chicago MSA. Department of Justice (DOJ), but not the CFPB, have authority to enforce the FHA.) Department of Housing and Urban Development (HUD) and U.S. ![]() The complaint is brought under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA), but not the Fair Housing Act (FHA). (Townstone) representing the first ever redlining complaint against a non-bank mortgage lender. On July 15, 2020, the CPFB filed a complaint in federal court against Townstone Financial, Inc. ![]()
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