The Consumer Financial Protection Bureau (CFPB) filed its notice of appeal in the U.S. District Court for the Northern District of Illinois, challenging the court’s decision to dismiss its case against Townstone Financial.
The bureau filed the 2020 complaint against the Chicago mortgage company and its owner Barry Sturner after it spent years investigating Townstone’s lending and marketing practices. The bureau alleged violations of the Equal Credit Opportunity Act (ECOA) and the Consumer Financial Protection Act (CFPA), as well as allegations Sturner fraudulently transferred assets in violation of 28 USC §§ 3301–3308, a statute governing fraudulent transfers involving debts.
After a tense legal battle, Federal Judge Franklin Valderrama granted Townstone and Sturner’s motion to dismiss, agreeing the CFPB improperly attempted to expand ECOA’s reach beyond the explicit language of the statute.
“We look forward to the opportunity to establish on appeal that CFPB went far beyond its statutory authority in the Townstone case,” Pacific Legal Foundation, whose attorney Jessica Thompson is part of the Townstone legal team, told RESPA News. “CFPB’s claims that Townstone discouraged prospective applicants were unfounded from the beginning. No borrower has ever complained about Townstone’s lending practices or statements on the radio. Pacific Legal Foundation is proud to represent Barry Sturner and Townstone Financial, free of charge, in their next battle against the CFPB.”
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