CFPB v. Townstone Financial

Docket number: No. 23-1654 (7th Cir.)

On August 21, the Hamilton Lincoln Law Institute filed an amicus brief in the Seventh Circuit in support of the district court’s dismissal of a complaint CFPB brought against Townstone Financial alleging violations of the Equal Credit Opportunity Act and Regulation B. CFPB alleged that Townstone discriminated against unspecified prospective mortgage applicants based on isolated comments Townstone employees made during radio shows and podcasts hosted by Townstone. The CFPB alleged that such comments “discouraged” prospective minority borrowers from applying for mortgages with Townstone.

HLLI’s amicus brief asserts that CFPB’s application of Regulation B and ECOA violates the First Amendment because it stifles free expression and facilitates viewpoint discrimination. HLLI’s brief also argues that CFPB’s complaint fails the Supreme Court’s plausibility standard and amounts to regulatory overreach. The complaint represents an effort by CFPB to strong-arm “inclusive” social policy rather than root out invidious discrimination, which was Congress’s intent when it passed ECOA. Accordingly, the district court correctly dismissed the complaint and HLLI’s brief encourages the appellate court to affirm that decision.