Judge Tosses CFPB Discrimination Case Against Mortgage Lender

A Chicago-area mortgage lender was cleared of a CFPB complaint because a fair lending law protects loan applicants from discrimination but doesn’t bar discouraging them from applying, a federal judge ruled.

Judge Franklin U. Valderrama of the U.S. District Court for the Northern District of Illinois on Friday ruled that the Consumer Financial Protection Bureau couldn’t bring a case against Townstone Financial Inc. and its owner, Barry Sturner, under the Equal Credit Opportunity Act.

Valderrama said in his 26-page opinion that he appreciated the CFPB’s efforts to “prevent the deplorable practice of discouraging people, on the basis of race, from ...