On April 4, the U.S. District Court for the Northern District of Illinois received an amicus brief from multiple nonprofits opposing a joint motion to vacate a final judgment in a case involving the CFPB and a mortgage lender. The amici curiae, comprising 14 nonprofit, civil liberties, fair housing, and consumer protection organizations, argued the motion was an improper use of a procedural rule that allows a party to seek relief from a final judgement, which applies only in extraordinary circumstances.
As previously covered by InfoBytes, the CFPB sued the mortgage lender in 2020 alleging it violated the ECOA and Regulation B, the CFPA, and that a mortgage broker fraudulently transferred assets. Specifically, the CFPB alleged there were disparities in the lender’s mortgage lending practices to Black borrowers and applicants in majority-Black neighborhoods. The defendant first came to the CFPB’s attention in 2017 due to a statistically significant disparity on a “redlining screen” conducted on HMDA data. The CFPB then filed suit. The case was first dismissed by this same district court (covered here), and the CFPB appealed the decision to the 7th Circuit (covered here); the 7th Circuit reversed the district court’s dismissal in July 2024 (covered here). In November 2024, the parties filed a proposed stipulated final judgment and order, which would require the lender to pay a $105,000 civil money penalty, among other remedies (covered here).
Now, under new agency leadership, the CFPB announced that it was moving to vacate the judgment (covered here). In response, the amici argued the CFPB’s new leadership’s disagreement with the previous administration’s settlement does not constitute the “extraordinary circumstances” required for relief from the previous judgment. The only new circumstance cited for vacatur was the CFPB’s new leadership believing the case “should not have been filed” five years ago, according to the amici. The amici held that “Rule 60(b) is not a magic eraser” to undo final judgments from earlier civil litigation based on policy disagreements. The district court considered the amici brief and has invited parties to file responses.
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