Mar 28, 04:08 PM

CFPB Seeks to Vacate 2020 Discrimination Case Against Townstone Financial as Russell Vought Critiques CRA Rule Withdrawal

The Consumer Financial Protection Bureau (CFPB) is seeking to vacate a discrimination case against Townstone Financial, a mortgage lender, which had previously been filed under the agency's former leadership in 2020. This unusual move comes as the CFPB's Acting Director, Russell Vought, claims that the bureau 'abused its power' in the case, which was initially brought to address allegations of discrimination against Black borrowers. The CFPB's decision has been met with approval from the Financial Services Committee, which criticized the prior settlement as politically motivated. Concurrently, the Federal Reserve and two other banking regulators announced plans to withdraw the Community Reinvestment Act (CRA) rule established in 2023, also citing ongoing litigation. This action has raised concerns among advocates who argue it could exacerbate wealth gaps and neglect the needs of vulnerable communities.