Townstone Financial is being pursued by the Consumer Financial Protection Bureau for comments made by Townstone owner Barry Sturner on the Townstone Financial Show—a weekly radio program and podcast.
“The CFPB is pursuing a radical racial equity agenda at the expense of separation of powers and freedom of speech,” the Pacific Legal Foundation said in its defense of Sturner. “Government agencies can neither claim power they’re not authorized to have, nor abuse their authority to inject social agendas into the business practices of an entire industry. Doing so runs roughshod over constitutional protections for speech and the economic liberty of legitimate businesses.”
An editorial in the Wall Street Journal notes the lawsuit is aimed at silencing the critics of Chicago’s crime problem.
“The foundation and other attorneys for Townstone have argued in federal court that the CFPB’s action violates the First Amendment right to free speech and exceeds the agency’s authority under the Equal Credit Opportunity Act,” John Berlau, director of finance policy at the Competitive Enterprise Institute, and Stone Washington wrote in a Wall Street Journal editorial on the lawsuit.
The editorial goes further. The writers stated that "The CFPB’s action against Townstone is concerning for many reasons. Chief among them is the lawsuit’s blatant attempt to apply antidiscrimination laws to a speech made to a general audience in a mass-media venue rather than to individual customers or employees in a workplace. The Pacific Legal Foundation, a public-interest law group representing Townstone, warns in a legal brief that this approach to enforcement “would arrogate to the CFPB the authority to censor speech.”
Sturner is being accused by the CFPB of making “statements that would discourage African-American prospective applicants from applying for mortgage loans,” according to the complaint. Allegedly, he violated the Equal Credit Opportunity Act.
In its initial filing against Townstone and Sturner, the CFPB alleged that “Townstone’s CEO stated that the South Side of Chicago between Friday and Monday is “hoodlum weekend” and that the police are ‘the only ones between that turning into a real war zone and keeping it where it’s kind of at.”
The CFPB’s lawsuit was dismissed on Feb. 3 by federal Judge Franklin U. Valderrama in the Northern District of Illinois. Still, the CFPB has appealed that ruling.
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