On January 17, the CFPB released its complaint and proposed consent order against a nondepository mortgage company, alleging violations of the ECOA and Regulation B as well as the CFPA. The CFPB seeks to enjoin the company from residential mortgage lending activities for five years and impose a $1.5 million civil money penalty. However, the CFPB noted that in 2024 the company ceased originating mortgage loans voluntarily and wound down its mortgage-lending business.
The complaint alleged the company engaged in a pattern or practice of unlawful redlining from around 2019 through 2021. In addition, the company discouraged current and prospective applicants residing in certain neighborhoods from making or pursuing an application for credit from the company. In areas with substantial Black and Hispanic populations, the Bureau alleged the company received a disproportionately low number of home loan applications and made few mortgage loans. The Bureau alleged that the company’s mortgage loan officers predominantly served and marketed to majority-white neighborhoods, thus neglecting majority-Black and Hispanic areas. Emails exchanged by loan officers indicated racial bias and discriminatory animus. The CFPB also alleged that the company failed to address known redlining risks intentionally, despite being aware of such risks since 2019.
As a result of these allegations, the complaint levied two counts against the company: violations of the ECOA and violations of the CFPA, citing discriminatory practices and failure to conform to consumer financial law.
