Banking Law News

Chicago Lender’s Racist Comments Led to Redlining, CFPB Says

July 15, 2020, 10:32 PM

A Chicago lender illegally discouraged prospective Black borrowers from applying for mortgages by making racist remarks in podcasts and other marketing efforts, the Consumer Financial Protection Bureau said in a lawsuit filed Wednesday.

Townstone Financial, Inc. violated the Equal Credit Opportunity Act and other laws with racist remarks about majority Black neighborhoods on a radio show and podcast affiliated with its business, the CFPB said in a complaint filed in the U.S. District Court for the Northern District of Illinois.

Townstone also engaged in illegal redlining practices, drawing only 37 mortgage applications from Black applicants out of more than 2,700...

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