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Last week, the Consumer Financial Protection Bureau (CFPB) proposed a new rule amending the regulation that was used to censor PLF client Barry Sturner, former owner of a small mortgage brokerage firm, Townstone Financial, Inc.
In March 2025, following an internal investigation launched under the new administration, CFPB officials determined that their case against Barry and Townstone—alleging racial discrimination—was both legally and factually baseless. CFPB filed a joint motion with Townstone seeking to vacate a November 2024 settlement and return the $105,000 fine paid by the firm, but shockingly, a federal judge rejected the motion a few months later, calling the government’s reversal on the case “breathtaking” but “unpersuasive.”
Steve Simpson, director of PLF’s separation of powers practice, called the proposed amendment "a significant improvement," noting that the rule in question “has been overly broad and vague for decades, leading enforcement agencies to enjoy broad power to threaten creditors with financial ruin for saying things that Washington bureaucrats found offensive.”
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