On June 12, the U.S. District Court for the Northern District of Illinois denied a motion to vacate a November 2024 stipulated final judgement and order requiring a Chicago-based mortgage broker to pay a $105,000 civil money penalty and adopt five-year compliance plan.
The broker and the CFPB had jointly asked the court to set aside the settlement, arguing the case lacked evidence and improperly targeted the broker’s radio-show commentary. The court disagreed and found that the parties failed to meet their burden of demonstrating “extraordinary circumstances” necessary to justify relief under Rule 60(b)(6). The court noted that the parties’ joint motion was unprecedented, as it sought to undo a settlement voluntarily entered into by the two sides
The underlying lawsuit, first brought in 2020, claimed the broker’s on-air statements discouraged prospective African-American applicants form seeking credit, violating the Equal Credit Opportunity Act and Regulation B. The CFPB settled the case in November 2024, its first redlining case against a nonbank mortgage lender. The Bureau’s settlement followed a Seventh Circuit decision affirming the applicability of Regulation B’s prohibition on “discouragement” to prospective applicants
Putting It Into Practice: The court’s refusal to rip up the settled action comes on the heels of other redlining actions the Bureau has recently terminated (previously discussed here and here). While the CFPB under its current leadership has shown a willingness to retreat from certain enforcement positions—particularly in areas like fair lending—courts and private litigants such as community or advocacy groups—are increasingly asserting standing to oppose the Bureau’s efforts to abandon prior enforcement wins.
