After the Consumer Financial Protection Bureau (CFPB) officially challenged a US District Court ruling that effectively legalized discriminatory lending, National Community Reinvestment Coalition President and CEO Jesse Van Tol released the following statement:
It is patently ludicrous for any court to find that a federally-regulated mortgage company and its owner, President and CEO can host a radio show where the owner publicly called Black neighborhoods “jungles” that are “scary places” because they are “packed [with] people from all over the world” who participate in “hoodlum weekends” while marketing financial services to the public and not face any consequences for their discriminatory conduct.
Somehow, a federal judge decided that a lender saying these things on the radio show where he tries to drum up sales does not discourage Black people in those neighborhoods from seeking a loan from his company. The evident personal racism of the chief executive of a lender would inarguably teach prospective homebuyers that they don’t stand a chance of getting a fair shake from the firm he runs. And his discouragement worked because Townstone Financial received significantly fewer applications from applicants who lived in Black neighborhoods than other lenders in the area.
Townstone Financial’s conduct is egregious. It plainly violates both the letter and spirit of federal antidiscrimination laws. The earlier ruling finding otherwise is an act of cynical politics masquerading as high-minded jurisprudence.
The CFPB is right to seek redress from a higher court – before the entirety of our basic legal protections for people of color and other economically and socially marginalized communities evaporate under the sheer weight of this nonsense.
The case has sweeping implications for the efficacy of the Equal Credit Opportunity Act (ECOA), as NCRC has noted previously. ECOA covers discouragement of prospective applicants as much as it protects applicants. Discouragement stops applicants and prospective applicants from getting access to important financial products and services.
