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Government Sues Mortgage Lender for Mentioning Crime in Chicago on Radio Show

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Shadow State has been commenting on news items he thinks are important. His comments often don’t relate remotely to the stories he comments on. FR decided to take his last few comments and turn them into a post.

By Shadow State

The US Consumer Financial Protection Bureau (CFPB ) has taken a small mortgage company to court because of a radio show and podcast.

The defendants argue that this is a First Amendment issue and an authority violation of CFPB’s enforcement of the Equal Credit Opportunity Act.

Townstone Financial, and its owner Barry Sturner, of Greater Chicago, said some things the CFPB alleged in a lawsuit that “would” discourage black loan-seekers from applying for a mortgage.

On his weekly radio and podcast, the Townstone Financial Show, Sturner mentioned rising crime in the city.

The CFPB didn’t allege Townstone’s customers were mistreated or discriminated against.

But Sturner spoke of a specific area – how rampant crime was rising on Chicago’s South Side, adding the word “hoodlums,” and praising police for preventing the city from becoming “a real war zone.”

The CFPB asserted that Sturner’s statement would discourage applicants for the company’s services based on their race. The neighborhoods in question are mostly black.

The Pacific Legal Foundation represents Townstone in the lawsuit. Pacific Legal filed a brief arguing that CFPB should not carry out its regulatory function by censoring speech. In their brief they wrote, if CFPB prevails in the lawsuit, “anyone employed by or associated with a consumer finance firm who makes a random comment on social media could be subject to punishment by the agency.”

In February, Judge Franklin Valderrama of the Northern District of Illinois threw out the lawsuit, distinguishing between actually discriminating against applicants, and “discouraging” them from applying for a mortgage versus speaking about rising crime in certain neighborhoods.

The CFPB appealed his decision in April.

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