CFPB and DOJ Sue Land Developer Over Allegations of Discriminatory Lending

​On December 20, 2023, the CFPB announced that, along with the DOJ, it had filed suit against a Texas-based developer and lender for operating an allegedly illegal land sales scheme that targeted Hispanic borrowers.

​The complaint, filed in the U.S. District Court for the Southern District of Texas, alleges that the lender sells borrowers “flood-prone land without water, sewer, or electrical infrastructure”, and then allows borrowers to take out loans they cannot afford in violation of the Consumer Financial Protection Act, Equal Credit Opportunity Act, Interstate Land Sales Full Disclosure Act, and the Fair Housing Act.  The CFPB alleges that the lender sets borrowers up to fail with loans they cannot afford as evidenced by the fact that about 1 in 4 loans from the lender ends in foreclosure​.

The lender allegedly targets Spanish-speaking borrowers by advertising almost exclusively in Spanish, often via social media posts featuring elements such as national flags and regional music from Latin America.

This is the CFPB’s first federal court lawsuit charging a defendant with violations of the Interstate Land Sales Full Disclosure Act.