1 

IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION, 

Plaintiff, 

v. 

TOWNSTONE FINANCIAL, INC. 

and BARRY STURNER, 

Defendants. 

Case No. 1:20-cv-04176 

NOTICE OF APPEAL

Plaintiff Bureau of Consumer Financial Protection hereby gives notice that it appeals to 

the United States Court of Appeals for the Seventh Circuit from the final judgment entered in 

this action on February 3, 2023 (Docket No. 111). 

 

Date: April 3, 2023 Respectfully submitted, 

/s/ Jacob A. Schunk 

JACOB A. SCHUNK (IA AT001908) 

Email: jacob.schunk@cfpb.gov 

Telephone: (202) 718-0394 

GREGORY W. JONES (IL ARDC #6313157) 

Email: gregory.jones@cfpb.gov 

MARY OLSON (IL ARDC #6297334) 

Email: mary.olson@cfpb.gov 

230 S. Dearborn St., Suite 1590 

Chicago, IL 60604 

and 

1700 G Street, NW 

Washington, DC 20552 

Attorneys for the Bureau of Consumer Financial 

Protection 

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IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION, 

Plaintiff, 

v. 

TOWNSTONE FINANCIAL, INC. 

and BARRY STURNER, 

Defendants. 

Case No. 1:20-cv-04176 

SEVENTH CIRCUIT RULE 3(c) DOCKETING STATEMENT

Pursuant to Seventh Circuit Rule 3(c), Plaintiff Bureau of Consumer Financial Protection 

(Bureau) submits this docketing statement along with its Notice of Appeal. 

I. Jurisdiction of the District Court 

The district court had jurisdiction over this action because it was brought under federal 

law (the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691–1691f, and an implementing 

regulation, 12 C.F.R. Part 1002; the Consumer Financial Protection Act of 2010, 12 U.S.C. 

§ 5536(a)(1)(A); and the Federal Debt Collection Procedure Act, 28 U.S.C. §§ 3301–3308), 

presented federal questions, 28 U.S.C. § 1331, and was brought by an agency of the United 

States, 28 U.S.C. § 1345. 

II. Jurisdiction of the Court of Appeals 

The U.S. Court of Appeals for the Seventh Circuit has jurisdiction over this appeal under 

28 U.S.C. § 1291. The Bureau seeks review of a final judgment entered by the district court on 

February 3, 2023 (Docket No. 111). That judgment dismissed the Bureau’s complaint, thereby 

denying all relief sought by the Bureau. The Bureau files its notice of appeal concurrently with 

this Docketing Statement, on April 3, 2023. 

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III. Prior or Related Appellate Proceedings 

There are no prior or related appellate proceedings. 

IV. Additional Requirements of Circuit Rule 3(c)(1) 

This case does not involve a criminal conviction or a collateral attack on a criminal 

conviction, nor is there any prior relevant litigation in the district court that satisfies the criteria 

of 28 U.S.C. § 1915(g). 

Date: April 3, 2023 Respectfully submitted, 

/s/ Jacob A. Schunk 

JACOB A. SCHUNK (IA AT001908) 

Email: jacob.schunk@cfpb.gov 

Telephone: (202) 718-0394 

GREGORY W. JONES (IL ARDC #6313157) 

Email: gregory.jones@cfpb.gov 

MARY OLSON (IL ARDC #6297334) 

Email: mary.olson@cfpb.gov 

230 S. Dearborn St., Suite 1590 

Chicago, IL 60604 

and 

1700 G Street, NW 

Washington, DC 20552 

Attorneys for the Bureau of Consumer Financial 

Protection 

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BUREAU OF CONSUMER 

FINANCIAL PROTECTION,

Plaintiff,

v.

TOWNSTONE FINANCIAL, INC. and 

BARRY STURNER,

Defendants.

No. 20-cv-4176

Judge Franklin U. Valderrama

MEMORANDUM OPINION AND ORDER

The Equal Credit Opportunity Act (ECOA) makes it “unlawful for any creditor 

to discriminate against any applicant with, respect to any aspect of a credit 

transaction . . . on the basis of race, color, religion, national origin, sex or marital 

status, or age . . . .” 15 U.S.C. § 1691(a). The ECOA’s implementing regulation,

Regulation B, extends the ECOA’s prohibition to “prospective applicants.” 12 C.F.R. 

§ 1002.4(b). The Bureau of Consumer Financial Protection (CFPB) filed this lawsuit 

against Townstone Financial, Inc. (Townstone), a mortgage broker/lender and its 

owner Barry Sturner (Sturner) (collectively, Defendants) for allegedly discouraging 

prospective African-American applicants in the Chicago metropolitan area from 

applying for mortgages. R. 27, First Amended Complaint (FAC).1 Defendants have 

moved to dismiss the FAC with prejudice. R. 31, Mot. Dismiss. For the following 

reasons, Defendants’ motion to dismiss is granted. 

1Citations to the docket are indicated by “R.” followed by the docket number and, where 

necessary, a page or paragraph citation.

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Background

I. The Parties

The CFPB is an independent agency of the United States created by the

Consumer Financial Protection Act of 2010 (CFPA), with authority to enforce the 

CFPA and ECOA. FAC ¶ 8.2 Townstone is a mortgage broker/lender headquartered 

in Chicago, which operates in Illinois, Indiana, Michigan, Wisconsin, and Florida. Id.

¶ 9. Most of Townstone’s mortgage lending and brokering takes place in the ChicagoNaperville-Elgin Metropolitan Statistical Area (Chicago MSA). Id. ¶¶ 4, 9. Sturner is 

Townstone’s co-founder, sole owner, sole director, President, and Chief Executive 

Officer. Id. ¶ 13. Sturner is also a loan officer. Id.

II. The Townstone Financial Show

Starting as early as 2014, Townstone has marketed its services through its 

own radio show and podcast called “The Townstone Financial Show.” FAC ¶ 24. The 

Townstone Financial Show was conducted weekly on AM radio and reached the entire 

Chicago MSA. Id. ¶ 29. A weekly podcast of the radio show is also made available 

online, and the show has been streamed on Facebook Live and advertised on 

Facebook, Twitter, and LinkedIn. Id. The Townstone Financial Show is a long-form 

commercial advertisement, in which the hosts discuss mortgage-related issues on the 

show and take questions from prospective applicants. Id. ¶ 26. Since about January 

2015, the Townstone Financial Show has been co-hosted by Sturner and another 

2The Court accepts as true all of the well-pled facts in the FAC and draws all reasonable 

inferences in favor of the CFPB. Smith v. City of Chicago, 3 F.4th 332, 334 n.1 (7th Cir. 2021) 

(internal citation omitted).

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senior loan officer. Id. ¶ 27. Townstone’s website and the Townstone Financial Show 

characterize the hosts of the Townstone Financial Show as “Chicago real-estate 

experts.” Id. ¶ 28. 

The Townstone Financial Show has allegedly included statements that would 

discourage African-American prospective applicants from applying for mortgage 

loans from Townstone. FAC ¶ 32. For instance, during a January 2014 broadcast of 

the Townstone Financial Show, a caller from Markham, Illinois, a city with an 80.3% 

African-American population, asked how he and his wife could improve their credit 

scores. Id. ¶ 33. The Townstone host responded that “[you’ve] got to keep those women 

in line over there in Markham.” Id. The host went on to state that the caller should 

“stop spending freaking money [on his wife] and tell her to get a better job.” Id. While

discussing the couple’s credit concerns, the host turned his comments toward 

Markham generally, claiming that “it’s crazy in Markham on weekends” and stating, 

“I know, I’ve been to Markham.” Id. “You drive very fast through Markham,” he 

continued, “and you don’t look at anybody or lock on anybody’s eyes in Markham . . . .

You look at your dashboard, you don’t lock on anybody.” Id.

In the same month, Townstone’s then-president informed listeners on the 

Townstone Financial Show that it was a great time to buy, rent, and sell. FAC ¶ 34. 

The show’s hosts, including a local realtor and a bankruptcy attorney, recommended 

that the listeners who were preparing a home for sale should take down their 

Confederate flags. Id.

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In a June 2016 episode of the Townstone Financial Show, Sturner volunteered 

his view of the South Side of Chicago, an area that is majority-African American. FAC 

¶ 35. Sturner stated that the South Side of Chicago is “hoodlum weekend” between 

Friday and Monday, and that the police are “the only ones between that [area]

turning into a real war zone and keeping it where it’s kind of at.” Id.

In January 2017, on the Townstone Financial Show, Sturner and the other 

hosts discussed a now-replaced grocery store in downtown Chicago that was part of 

the Jewel-Osco grocery-store chain. FAC ¶ 36. Sturner described “[having] to go to 

the Jewel on Division,” which he referred to as “Jungle Jewel.” Id. Sturner called the 

“Jungle Jewel” a “scary place,” attributing his fear and the store’s nickname to the 

“Jungle Jewel’s” patrons who “packed” the store and “were people from all over the 

world.” Id.

In a November 2017 episode, Townstone’s senior loan officer discussed a recent 

skydiving experience and the ensuing “rush” from the jump. FAC ¶ 37. Another 

Townstone host responded that he thought skydiving was crazy, and suggested that 

someone who walked “through the South Side at 3AM.” could get the “same rush.” Id.

Despite African Americans making up 30% of the population of the City of 

Chicago, Townstone has not targeted any marketing toward African Americans in the 

Chicago MSA. FAC ¶ 40.

III. Applications from African-American Neighborhoods

Based on Home Mortgage Disclosure Act data from 2014 through 2017, 

Townstone received an average of 740 mortgage-loan applications each year. FAC 

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¶ 42. Townstone brokered an average of 60 total Federal Housing Administration and 

Veterans Administration home loans each year. Id.

Townstone has drawn few mortgage applications from African-American 

applicants throughout the Chicago MSA. FAC ¶ 43. From 2014 to 2017, for example, 

Townstone drew around 2,700 applicants, only 37 (1.4%) of which came from African 

Americans in the Chicago MSA. Id. During the same period, Townstone drew an 

average of five or six applications each year (0.8%, 0.8%, 0.7%, and 0.9% of all 

Townstone applications) for properties in high-African-American neighborhoods, 

even though such neighborhoods made up 13.8% of the Chicago MSA’s census tracts. 

Id. ¶ 44. Of Townstone’s five or six applications each year for properties in highAfrican-American neighborhoods (more than 80% African American), more than half 

each year were from non-Hispanic white applicants. Id.

Similarly, only 2.3%, 1.4%, 1.4%, and 2.2% of Townstone’s applications for the 

years 2014 through 2017, respectively, came from applicants applying for mortgage 

loans for properties in majority-African-American areas, even though 18.7% of the 

Chicago MSA’s census tracts were majority-African American. FAC ¶ 45. While 

Townstone drew 2.3%, 1.4%, 1.4%, and 1.3% of its applications for properties in 

majority-African-American neighborhoods from 2014 through 2017, respectively, 

Townstone’s peers drew many times more—8.2%, 7.6%, 7.7%, and 8.1%. Id. ¶ 49.

IV. Procedural History

The CFPB filed suit against Defendants on July 15, 2020, R. 1, and amended 

its complaint on November 25, 2020, FAC. The three-count complaint alleges that: 

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(1) Townstone violated the ECOA, 15 U.S.C. § 1691(a), and its implementing 

regulation, Regulation B, 12 C.F.R. § 1002.4(b) (Count I); (2) Townstone violated the 

CFPA, 12 U.S.C. § 5536(a)(1)(A) (Count II); and (3) Sturner fraudulently transferred 

assets in violation of 28 U.S.C. §§ 3301–3308. FAC ¶¶ 53–78. Defendants have moved

to dismiss the FAC. Mot. Dismiss. Defendants subsequently filed a motion for leave 

to file a notice of supplemental authority regarding W. Virginia v. Env’t Prot. Agency, 

213 L. Ed. 2d 896, 142 S. Ct. 2587 (2022). R. 65; R. 67. The CFPB responded to 

Defendants’ notice of supplemental authority. R. 71.3 The Court subsequently held 

an in-person hearing on Defendants’ motion to dismiss the FAC. R. 74. 

Legal Standard

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the 

complaint. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 

820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include only “a short and 

plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. 

Civ. P. 8(a)(2). To survive a motion to dismiss, a complaint need only contain factual 

allegations, accepted as true, sufficient to “state a claim to relief that is plausible on 

its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads 

3In West Virginia, the Supreme Court held that the Environmental Protection Agency (EPA)

did not have authority to adopt the regulation at issue because it raised a “major question” 

of ”economic and political significance” as to which Congress had not clearly delegated 

authority to the EPA. 142 S. Ct. at 2613. The Court has considered Defendants’ arguments 

as to the applicability of West Virginia to this case, R. 67, and the CFPB’s response, R. 71, 

and agrees with the CFPB that the major-questions doctrine is unimportant to the issue 

presented here. 

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factual content that allows the court to draw the reasonable inference that the 

defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing 

Twombly, 550 U.S. at 556). The allegations “must be enough to raise a right to relief 

above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are 

entitled to the assumption of truth are those that are factual, rather than mere legal 

conclusions. Iqbal, 556 U.S. at 678–79.

Analysis

I. The ECOA and Regulation B (Count I)

The CFPB alleges that Townstone’s acts and practices would discourage 

African-American prospective applicants, as well as prospective applicants in 

majority- and high-African-American neighborhoods in the Chicago MSA from 

seeking credit, in violation of Regulation B and the ECOA. FAC ¶¶ 54–55. 

The ECOA provides, in relevant part, that “[i]t shall be unlawful for any 

creditor to discriminate against any applicant, with respect to any aspect of a credit 

transaction—on the basis of race, color, religion, national origin, sex or marital 

status, or age (provided the applicant has the capacity to contract) . . . .” 15 U.S.C. 

§ 1691(a). The ECOA was a landmark civil rights law enacted in 1974 to protect 

individuals and businesses against discrimination in accessing and using credit, “a 

virtual necessity of life” for most Americans. S. Rep. No. 94-589, at 3–4 (1976); see 

also Treadway v. Gateway Chevrolet Oldsmobile Inc., 362 F.3d 971, 975 (7th Cir. 

2004) (the ECOA enacted to prohibit discrimination in credit transactions). 

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In Section 1691b of the ECOA, Congress directed, first the Federal Reserve 

Board, and then the CFPB,4 to make regulations to carry out the purposes of the 

ECOA:

The Bureau shall prescribe regulations to carry out the purposes of this 

subchapter. These regulations may contain but are not limited to such 

classifications, differentiation, or other provision, and may provide for such 

adjustments and exceptions for any class of transactions, as in the judgment 

of the Bureau are necessary or proper to effectuate the purposes of this 

subchapter, to prevent circumvention or evasion thereof, or to facilitate or 

substantiate compliance therewith.

15 U.S.C. § 1691b(a). 

The resulting regulations enacted in 1975, known collectively as Regulation B, 

provide in pertinent part: 

Discouragement. A creditor shall not make any oral or written statement, in 

advertising or otherwise, to applicants or prospective applicants that would 

discourage on a prohibited basis a reasonable person from making or pursuing 

an application.

12 C.F.R. § 1002.4(b). 

Defendants move to dismiss Count I based on Regulation B and the ECOA, 

arguing that the CFPB improperly attempts to expand the ECOA’s reach beyond the 

express and unambiguous language of the statute. R. 32, Memo. Dismiss at 5 (citing 

Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–

43 (1984)). Specifically, Defendants argue that while the ECOA regulates behavior 

towards applicants for credit, it does not regulate any behavior relating to prospective 

4In 2010, Congress transferred the Federal Reserve Board’s rulemaking authority to the 

CFPB. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 

124 Stat. 1376, 2083–84 (2010); see Regions Bank v. Legal Outsource PA, 936 F.3d 1184, 1208 

n.9 (11th Cir. 2019). 

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applicants who have not yet applied for credit. Memo Dismiss at 4. The CFPB 

responds that Regulation B’s longstanding discouragement prohibition is authorized 

by and necessary to the ECOA, and that courts have consistently recognized 

Regulation B’s discouragement prohibition, even when applied to prospective 

applicants. R. 35, Resp. at 8–10 (citing Alexander v. AmeriPro Funding, Inc., 848 F.3d 

698 (5th Cir. 2017); Dhade v. Huntington Learning Centers, Inc., 414 F. Supp. 3d 703 

(D. Del. 2019); Page v. Midland Fed. Sav. & Loan Ass’n, 2013 WL 5211747, at *5 

(N.D. Ill. Sept. 13, 2013)).

The parties’ arguments present the question of whether the agency’s 

interpretation of the ECOA in Regulation B is one that the ECOA permits. The Court

approaches that inquiry, as it must, “through the two-step framework set forth in 

Chevron[.]” Cook Cnty., Illinois v. Wolf, 962 F.3d 208, 221 (7th Cir. 2020) (citing 

Chevron, 467 U.S. 837). The first step of Chevron is to determine “whether Congress 

has directly spoken to the precise question at issue.” Id. (internal quotation marks 

omitted). If Congress has spoken to the precise question at issue “unambiguously,” 

then “that is the end of it: the agency and courts alike are bound by what Congress 

wrote.” Id. However, if Congress has “not spoken clearly,” the court moves on to step 

two, in which the court “consider[s] whether the agency’s interpretation reflects a 

permissible construction of the statute.” Id. 

A. Chevron Step One

Turning to step one of Chevron, as stated above, the Court looks to the text of 

the ECOA to determine “whether Congress has directly spoken to the precise question 

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at issue,” Wolf, 962 F.3d at 221, namely, whether the ECOA prohibits discouragement 

of prospective applicants on the basis of race. “Statutory construction must begin with 

the language employed by Congress and the assumption that the ordinary meaning 

of that language accurately expresses the legislative purpose.” Turley v. Gaetz, 625 

F.3d 1005, 1008 (7th Cir. 2010) (quoting Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 

469 U.S. 189, 194 (1985)) (internal quotation marks omitted). “Statutory 

interpretation is guided not just by a single sentence or sentence fragment, but by 

the language of the whole law, and its object and policy.” Commodity Futures Trading 

Comm’n v. Worth Bullion Grp., Inc., 717 F.3d 545, 550 (7th Cir. 2013) (internal 

quotation marks and citation omitted). “Indeed, statutory interpretation is a holistic 

endeavor and, at a minimum, must account for the statute’s full text, language as 

well as punctuation, structure, and subject matter.” Trs. of Chi. Truck Drivers, 

Helpers & Warehouse Workers Union (Indep.) Pension Fund v. Leaseway Transp. 

Corp., 76 F.3d 824, 828 (7th Cir. 1996) (internal quotation marks and citation 

omitted); see also Estate of Moreland v. Dieter, 576 F.3d 691, 699 (7th Cir. 2009).

The ECOA states that “[i]t shall be unlawful for any creditor to discriminate 

against any applicant, with respect to any aspect of a credit transaction—on the basis 

of race, color, religion, national origin, sex or marital status, or age (provided the 

applicant has the capacity to contract) . . . .” 15 U.S.C. § 1691(a) (emphases added). 

The ECOA further defines “applicant” to mean “any person who applies to a creditor 

directly for an extension, renewal, or continuation of credit, or applies to a creditor 

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indirectly by use of an existing credit plan for an amount exceeding a previously 

established credit limit.” Id. § 1691a(b). 

The plain text of the ECOA thus clearly and unambiguously prohibits 

discrimination against applicants, which the ECOA clearly and unambiguously 

defines as a person who applies to a creditor for credit. 15 U.S.C. §§ 1691(a), 1691a(b).

The Court therefore finds that Congress has directly and unambiguously spoken on 

the issue at hand and only prohibits discrimination against applicants. As such, “that 

is the end of it,” Wolf, 962 F.3d at 221, and the Court need not move on to the second 

step of the Chevron analysis because it is clear that the ECOA does not apply to 

prospective applicants.5 The Court consequently affords no deference to 12 C.F.R. 

§ 1002.4. See, e.g., Zimmerman v. Oregon Dep’t of Just., 170 F.3d 1169, 1173 (9th Cir. 

1999) (affording no weight to 28 C.F.R. § 35.140(a), having found that “Congress 

unambiguously expressed its intent for Title II not to apply to employment”); 

Patterson v. Illinois, Dep’t of Corr., 35 F. Supp. 2d 1103, 1108 (C.D. Ill. 1999) (same).

Case law supports the Court’s interpretation of the ECOA. The Seventh Circuit 

similarly found the ECOA’s definition of “applicant” to be unambiguous in Moran 

Foods, Inc. v. Mid-Atlantic Market Development Co., LLC, 476 F.3d 436, 441 (7th Cir. 

2007), a case cited by Defendants. There, Susan Camp, a party who had guaranteed 

her husband’s debt, brought a counterclaim alleging that a grocery store had violated 

5Because the Court finds that the ECOA unambiguously applies to “applicants” and not 

“prospective applicants,” the Court does not analyze whether the ECOA’s prohibition on 

“discrimination” encompasses “discouragement.” The Court likewise does not reach 

Defendants’ argument that the CFBP is attempting to create affirmative obligations with 

respect to marketing and the hiring of loan officers, nor its arguments under the First and 

Fifth Amendments. Memo. Dismiss at 8–9, 12–23. 

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the ECOA by discriminating against her based on her marital status. Id. at 437.

Camp obtained a jury verdict on her ECOA counterclaim. Id. On appeal, Camp asked 

to be awarded the attorney’s fees that she incurred in litigating her ECOA case and 

pursued additional relief under the ECOA. Id. at 437–38. 

In assessing Camp’s ECOA claim, the Seventh Circuit initially concluded that 

she was not an applicant at all: “Susan Camp was not an applicant for credit, and 

neither received credit nor was denied it. Instead, she guaranteed her husband’s debt 

and by doing so enabled his company to buy groceries from Moran on credit.” Moran, 

476 F.3d at 441. The court recognized, however, that the Federal Reserve Board had 

“defined ‘applicant’ for credit (the term in the statute) to include a guarantor.” Id.

(citing 12 C.F.R. §§ 202.2(e), 202.7(d)). While the Seventh Circuit acknowledged that 

“courts defer to administrative interpretations of statutes when a statute is 

ambiguous,” the court found that “there is nothing ambiguous about ‘ applicant’ and 

no way to confuse an applicant with a guarantor.” Id. (citations omitted). The court 

in Moran elaborated that “to interpret ‘applicant’ as embracing ‘guarantor’ opens 

vistas of liability that the Congress that enacted the Act would have been unlikely to 

accept.” Id.6 So too here, the Court doubts that the ECOA can be “stretched far 

6Ultimately, the court in Moran found that even if the Federal Reserve Board’s interpretation 

were authorized, Camp’s ECOA claim “must lose because she failed to prove discrimination.” 

476 F.3d at 441. The court therefore reversed the judgment of the district court. Id. at 442. 

As a result, the Seventh Circuit’s ECOA discussion in Moran is non-binding dicta. See 

FirstMerit Bank, N.A. v. Ferrari, 71 F. Supp. 3d 751, 758–59 (N.D. Ill. 2014). Even so, the 

analysis provides a straightforward interpretation of the ECOA, which the Court finds 

persuasive. 

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enough” to interpret a prohibition of discrimination against applicants as prohibiting 

discrimination of prospective applicants. Id. 

Defendants direct the Court to other Court of Appeals decisions as well, which 

hold that an “applicant” does not encompass a “guarantor” under the ECOA. Memo. 

Dismiss at 7 (citing Hawkins v. Cmty. Bank of Raymore, 761 F.3d 937, 942 (8th Cir. 

2014); Regions Bank v. Legal Outsource PA, 936 F.3d 1184, 1193 (11th Cir. 2019)). 

Both decisions buttress this Court’s finding that no deference is owed to Regulation 

B’s anti-discouragement provision for prospective applicants. 

In Hawkins, for example, the plaintiffs, guarantors, brought an ECOA claim 

alleging that the defendant bank discriminated against them based on their marital 

status. 761 F.3d at 939. The district court granted summary judgment against the 

plaintiffs, holding that they did not constitute “applicants” under the ECOA. Id. at 

940. On appeal, the plaintiffs insisted they could bring a claim under the ECOA 

because 12 C.F.R. § 202.2(e) of Regulation B provided that the definition of 

“applicant” included a guarantor. Id. Observing that the case turned on whether the 

court should defer to Regulation B Section 202.3(e)’s definition of “applicant,” which 

would allow the plaintiffs’ suit, the court applied the Chevron two-step framework. 

Id. At step one, the Eighth Circuit found that the “text of the ECOA clearly provides 

that a person does not qualify as an applicant under the statute solely by virtue of 

executing a guaranty to secure the debt of another.” Id. at 941. The court looked to 

the ECOA’s definition of “applicant,” reviewed the dictionary definition for “apply,” 

and concluded that “the plain language of the ECOA unmistakably provides that a 

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person is an applicant only if she requests credit.” Id. (citing 15 U.S.C. § 1691a(b); 

Webster’s Third New International Dictionary 105 (2002)). “Because the text of the 

ECOA is unambiguous regarding whether a guarantor constitutes an applicant,” the 

Eight Circuit stopped after Chevron step one and did not defer to the agency’s 

interpretation of applicant. Id. at 942. 

In Regions Bank, defendants who had been sued for breach of promissory notes 

and breach of guaranties brought counterclaims alleging they were discriminated 

against on the basis of marital status in violation of the ECOA. 936 F.3d at 1187. 

After losing on summary judgment, the defendants appealed, relying on the definition 

of “applicant” in Regulation B to argue that they could bring their ECOA 

counterclaims. Id. at 1190. The Eleventh Circuit, like the Eighth, applied the twostep Chevron framework to determine whether it owed deference to Regulation B’s 

interpretation of “applicant.” Id. Because the court “agree[d] with the Seventh and 

Eighth Circuits that the ordinary meaning of ‘applicant’ does not encompass a 

guarantor,” the Eleventh Circuit concluded that no deference was due Section 

202.2(e). Id. at 1193 (citing Moran, 476 F.3d at 441; Hawkins, 761 F.3d at 942). But 

see RL BB Acquisition, LLC v. Bridgemill Commons Dev. Grp., LLC, 754 F.3d 380, 

385 (6th Cir. 2014) (proceeding to Chevron step two and deferring to section 202.2(e) 

on theory that the term “applies” is ambiguous and that guarantors qualify as 

requesting credit because they “make formal requests for aid in the form of credit for 

a third party”).

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The CFPB attempts to distinguish Defendants’ authority by arguing that the

cases are inapposite because they analyze whether a “guarantor” is within the 

definition of “applicant” for purposes of bringing a private action under the ECOA. 

Resp. at 8–9. The CFPB posits that neither the definition of “applicant,” nor the 

question of whether a private right of action exists, is at issue in this case. Id. at 9.

True, the cases cited by Defendants involved the question of whether individual 

guarantors could maintain an action under the ECOA. But the analysis employed by 

the courts to resolve the issue in those cases provides a sound framework to resolve 

the issue in this case. 

The CFPB argues that it has more expansive enforcement powers than the 

private right of action, and moreover, its authority to prohibit discouragement of 

“prospective applicants” does not require stretching the term “applicant” to 

encompass “prospective applicants.” Id. The Court disagrees. 

The CFPB’s authority to enact regulations is not limitless. Under Section 

1691b, the CFPB “shall prescribe regulations to carry out the purposes of [the 

ECOA].” 15 U.S.C. § 1691b(a). While the delegating section is, no doubt, broad,7 the 

ECOA explicitly defines its “Scope of prohibition” as: “[i]t shall be unlawful for any 

creditor to discriminate against any applicant, with respect to any aspect of a credit 

transaction—on the basis of race[.]” Id. § 1691(a) (emphasis added). Indeed, the entire 

statutory scheme revolves around applicants. As Defendants point out, the word 

7The CFPB, relying on the Mourning test, argues that the broad language in Section 1691b 

means that it can enact any regulations “reasonably related” to the purposes of the ECOA. 

Resp. at 6–7. As discussed further below, the CFPB cannot use the Mourning test to avoid 

the two-step Chevron framework. See infra Section I.B.

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“applicant” is used twenty-six times in the statute, and the statute does not prohibit 

or discuss conduct prior to the filing of an application. See Memo. Dismiss at 4. So, 

contrary to the CFPB’s position, the statute’s expression of “applicant,” is essential to 

understanding whether the CFPB can regulate with respect to “prospective 

applicants.” The CFPB cannot regulate outside the bounds of the ECOA, and the 

ECOA clearly marks its boundary with the term “applicant.” 

The Court’s reading of the ECOA, moreover, is not limited to the civil liability 

section of the ECOA, which provides that “[a]ny creditor who fails to comply with any 

requirement imposed under this subchapter shall be liable to the aggrieved applicant 

for any actual damages sustained by such applicant acting either in an individual 

capacity or as a member of a class.” 15 U.S.C. § 1691e(a).8 That is, the Court is not 

looking exclusively at the private right of action section of the ECOA to conclude that 

the whole act applies only to those who qualify as proper plaintiffs under that section. 

While this case may not present the specific issue of whether a private right of action 

exists for a private prospective applicant under Section 1691e, Count I, nevertheless,

8By contrast, the holding in one of the cases relied on by the CFPB, Alexander v. AmeriPro 

Funding, Inc., 848 F.3d 698 (5th Cir. 2017), was limited to the court’s interpretation of the 

civil liability section, Section 1691e. There, the court found, without applying the Chevron 

framework, that “[d]iscouragement of a ‘prospective applicant’ may be regulatorily 

prohibited, but it cannot form the basis of a private claim or cause of action under the ECOA.” 

Id. at 708. The Court finds Alexander of limited utility because the court did not address 

whether the court should defer to Regulation B under the two-step Chevron framework. 

Similarly, in Dhade, 414 F. Supp. 3d at 707, another case relied on by the CFPB limited to a 

claim brought under the civil liability section, the court found that Regulation B did not 

expand the definition of “applicant” to include “prospective applicant” in Section 1691e. 

Although the court noted that “the ECOA vested the CFPB with enforcement powers that 

are more expansive than the private right of action,” it also applied Chevron step one to find 

that “[t]here is nothing ambiguous about ‘applicant,’” meaning the court should not defer to 

an agency’s interpretation of the statute. Id. at 706–07. 

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cannot stand if it is based on a portion of Regulation B to which the Court owes no 

deference. Put another way, the ECOA says nothing about “prospective applicants,” 

so if the Court does not defer to Regulation B, Count I fails to state a claim, regardless 

of Section 1691e. C.f. Dhade, 414 F. Supp. 3d at 707.

To further rebut Defendants’ authority, the CFPB cites to cases which 

purportedly acknowledge and treat Regulation B’s discouragement of prospective 

applicants as presumptively valid. Resp. at 9–10 (citing Treadway, 362 F.3d at 979–

80; Harbaugh v. Cont’l Ill. Nat’l Bank & Tr. Co. of Chi., 615 F.2d 1169, 1174 (7th Cir. 

1980)). Yet, a court’s acknowledgment of—or even reliance on—a regulation, when 

the validity of that regulation is not dispute, does not help the Court resolve the 

Chevron deference question at play here. The CFPB points to Page, 2013 WL 

5211747, at *5, in which the court rejected Defendant’s argument that the individual 

plaintiff’s claim under the civil liability provision failed because she never submitted 

an application. The court looked to Regulation B’s language and found that “the 

ECOA applies to all stages of a credit transaction.” Id. However, the court did not 

engage in the two-step Chevron analysis to determine whether the court should defer 

to Regulation B. Id. After applying the Chevron analysis, the Court respectfully 

disagrees with the court’s deference to Regulation B in Page. The CFPB cites to no 

authority in which a court engaged in a Chevron analysis and after doing so, deferred

to the anti-discouragement provision in Regulation B. For the reasons stated above, 

the Court finds that, when applying step one of Chevron, it cannot defer to Regulation 

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B’s anti-discouragement provision of with respect to “prospective applicants,” no 

matter how desirable it might be to do so as a policy matter. 

B. The CFPB’s Reliance on the Mourning Standard

Rather than engage in any Chevron analysis, the CFPB attempts to skirt the 

Chevron framework by emphasizing the broad language of the delegation provision 

of the ECOA, Section 1691b. Resp. at 6 (citing 15 U.S.C. § 1691b(a)). According to the 

CFPB, “Congress understood that additional rules may be necessary to prevent 

evasion of [the] ECOA’s prohibitions and expressly instructed the Board, then the 

[CFPB], to enact any such rules.” Id. The CFBP essentially suggests that Congress 

gave the CFPB rulemaking carte blanche in Section 1691b. In support, the CFPB 

directs the Court to a similar “anti-evasion provision” in the Truth in Lending Act 

(TILA), 15 U.S.C. § 1604(a)), as well as a pre-Chevron case interpreting the TILA, 

Mourning v. Fam. Publ’ns Serv., Inc., 411 U.S. 356 (1973). Id. at 6–7. 

In Mourning, the Supreme Court addressed whether the Federal Reserve 

Board had exceeded its authority under the TILA in promulgating a portion of its 

Regulation Z, commonly referred to as the “Four Installment Rule.” 411 U.S. at 358. 

Section 121 of the TILA required merchants who regularly extend credit with 

attendant finance charges to disclose certain contract information. 15 U.S.C. § 1631. 

The Federal Reserve Board promulgated Regulation Z, which required disclosure 

under Section 121 of the TILA whenever credit is offered to a consumer “for which 

either a finance charge is or may be imposed or which pursuant to an agreement, is 

or may be payable in more than four installments.” 411 U.S. at 362 (citing 12 CFR 

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§ 226.2(k)). To determine whether the Federal Reserve Board had exceeded its 

rulemaking authority, the Supreme Court looked to the delegation provision of the 

TILA, Section 105, which provided that the Federal Reserve Board “shall prescribe 

regulations to carry out the purposes of (the Act). These regulations may contain such 

classifications, differentiations, or other provisions, and may provide for such 

adjustments and exceptions for any class of transactions, as in the judgment of the 

Board are necessary or proper to effectuate the purposes of (the Act), to prevent 

circumvention or evasion thereof, or to facilitate compliance therewith.” 15 U.S.C. 

§ 1604.

From this language, the Supreme Court found that Congress gave the Federal 

Reserve Board “broad authority to promulgate regulations necessary to render the 

Act effective.” 411 U.S. at 365. Specifically, the Court in Mourning highlighted both 

the general grant of authority to promulgate regulations designed to carry out the 

purposes of the act, as well as the language in Section 105 allowing regulations that 

may define classifications and exceptions to ensure compliance with the TILA. Id.

Under the applicable precedent at the time, where an empowering provision of a 

statute, like Section 105, gave the agency the power to make such rules and 

regulations as may be necessary to carry out the act, the validity of a regulation 

promulgated under such an empowering provision would be sustained, so long as it 

was “reasonably related to the purposes of the enabling legislation.” 411 U.S. at 369

(internal quotation marks and citations omitted). The Supreme Court therefore 

upheld the “Four Installment Rule” because the rule was reasonably related to the 

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TILA’s objectives of preventing the evasion of its reporting requirements by 

concealing credit charges. Id. at 371. 

The CFPB submits that, per the Mourning decision, the anti-discouragement 

provision of Regulation B must be sustained, so long as it is reasonably related to the 

ECOA’s objectives. Resp. at 7. The Seventh Circuit, contends the CFPB, “has likewise 

held that rules necessary to render TILA effective must be sustained so long as they 

are reasonably related to the legislation’s purposes.” Id. (citing Muro v. Target Corp., 

580 F.3d 485, 494 n.9 (7th Cir. 2009)). However, neither Mourning nor Muro permits 

this Court to dodge the two-step Chevron framework. 

First and foremost, the Supreme Court mandates that a court faced with a 

disputed agency interpretation must apply Chevron. In City of Arlington, Tex. v. 

F.C.C., for example, the Supreme Court rejected using a non-Chevron standard when 

an agency interprets the scope of its own statutory authority. 569 U.S. 290, 296–97 

(2013). The Supreme Court held that the Chevron framework applied, reasoning that 

“[n]o matter how it is framed, the question a court faces when confronted with an 

agency’s interpretation of a statute it administers is always, simply, whether the 

agency has stayed within the bounds of its statutory authority.” Id. at 297 (emphasis 

in original). And in an earlier, post-Mourning case analyzing the TILA, the Supreme 

Court approached a regulation, not by asking whether the Federal Reserve Board’s 

interpretation was reasonably related to TILA’s objectives (the Mourning test), but 

by asking whether the statute had spoken on the issue (Chevron step one): “In 

determining whether the Board was empowered to make such a change, we begin, of 

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course, with the language of the statute. If the statute is clear and unambiguous ‘that 

is the end of the matter, for the court, as well as the agency, must give effect to the 

unambiguously expressed intent of Congress.’” Bd. of Governors of Fed. Rsrv. Sys. v. 

Dimension Fin. Corp., 474 U.S. 361, 368 (1986) (citing Chevron, 467 U.S. at 842–43); 

see also Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 92 (2002) (explaining 

that Mourning does not authorize agencies to “contravene Congress’ will”).

Seventh Circuit decisions, too, plainly require the Court to apply the Chevron 

framework when faced with a disputed agency interpretation that merits Chevron 

deference.9 See, e.g., Zaragoza v. Garland, 52 F.4th 1006, 1019 (7th Cir. 2022) 

(applying two-step Chevron framework to decision of Attorney General interpreting 

federal immigration statutes); Wolf, 962 F.3d at 221 (“The overriding question is 

whether the agency’s interpretation of the relevant statute is one the text will permit. 

We approach this inquiry through the two-step framework set forth in Chevron[.]”); 

Khan v. United States, 548 F.3d 549, 554 (7th Cir. 2008), as amended (Dec. 4, 2008) 

(reviewing general authority regulations under the two-step Chevron framework). 

Because the Chevron framework reigns supreme, numerous courts have 

rejected similar agency attempts to eschew Chevron in favor of Mourning. For 

instance, Defendants point to First Premier Bank v. U.S. Consumer Fin. Prot. Bureau, 

9An agency interpretation qualifies for Chevron step one when “it appears that Congress 

delegated authority to the agency generally to make rules carrying the force of law, and that 

the agency interpretation claiming deference was promulgated in the exercise of that 

authority.” United States v. Mead Corp., 533 U.S. 218, 226–27 (2001); see also Brumfield v. 

City of Chicago, 735 F.3d 619, 625–26 (7th Cir. 2013). This threshold question, sometimes 

referred to as “Chevron step zero,” see, e.g., Pugin v. Garland, 19 F.4th 437, 441 (4th Cir. 

2021), is not disputed in this case.

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819 F. Supp. 2d 906, 909 (D.S.D. 2011). R. 38, Reply at 2–3. In First Premier Bank, a 

bank sued the CFPB, seeking a preliminary injunction to postpone and enjoin the 

effective date of an amendment to a credit card fee regulation. 819 F. Supp. 2d at 909. 

The bank attacked the regulation amendment under the Administrative Procedure 

Act. Id. at 911–12. In analyzing the disputed regulation amendment, the court 

applied the two-step Chevron framework. Id. at 914. The CFPB argued that the 

Chevron framework did not apply, citing Mourning and two other pre-Chevron cases. 

Id. at 917 (citing Anderson Bros. Ford v. Valencia, 452 U.S. 205 (1981); Ford Motor 

Credit Co. v. Milhollin, 444 U.S. 555 (1980); Mourning, 411 U.S. 356). The court 

rejected the CFPB’s contention, stating “the language of Mourning and its progeny 

make sense standing alone only in a pre-Chevron setting” in which “‘pre-Chevron

courts frequently looked to the relative competence of the agency and the court in 

deciding the matter in question.’” Id. at 917–18 (quoting Oil, Chem. & Atomic Workers 

Int'l Union, AFL-CIO v. N.L.R.B., 46 F.3d 82, 90 (D.C. Cir. 1995)). 

Similarly in Colorado River Indian Tribes v. Nat’l Indian Gaming Comm’n, the 

National Indian Gaming Commission argued that its minimum internal control 

standards for a casino should be sustained under Mourning, as the rules were 

“reasonably related to the statutory purposes of the [Indian Gaming Regulatory Act].”

383 F. Supp. 2d 123, 143 (D.D.C. 2005), aff’d, 466 F.3d 134 (D.C. Cir. 2006). The court 

disagreed, explaining that “courts and agencies ‘are bound, not only by the ultimate 

purposes Congress has selected but by the means it has deemed appropriate, and 

prescribed, for the pursuit of those purposes.’” Id. (quoting MCI Telecommunications 

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Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 231 n.4 (1994)). The court concluded that 

“although Mourning stated that a broad grant of rule-making authority allows an 

agency to issue regulations that are ‘reasonably related to the purposes of the 

enabling legislation,’ courts have consistently read this language to describe a 

heightened level of deference that is due the agency’s interpretation of an ambiguous 

statute under Chevron step two, rather than a warrant to override a clear statute 

under Chevron step one.” Id. at 144 & n.15 (emphasis added) (collecting cases). 

The Court joins First Premier Bank and Colorado River Indian Tribes in 

declining the agency’s invitation to bypass Chevron by way of Mourning. The Court 

further sides with the numerous courts who have held that Mourning’s application 

belongs, if anywhere, in Chevron step two. See, e.g., Merck & Co. v. United States 

Dep't of Health & Hum. Servs., 385 F. Supp. 3d 81, 88–89 (D.D.C. 2019), aff’d, 962 

F.3d 531 (D.C. Cir. 2020) (rejecting agency’s attempt to circumvent Chevron in light 

of Mourning and collecting cases situating Mourning with Chevron’s second step); 

Chamber of Com. of U.S. v. N.L.R.B., 721 F.3d 152, 161 (4th Cir. 2013) (holding 

Mourning analysis only relevant once the court has determined that a statute is 

ambiguous, concluding “Mourning’s exhortation that we ‘defer to the informed 

experience and judgment of the agency to whom Congress delegated appropriate 

authority,’ . . . cannot be read as requiring [the court] to defer to the agency’s 

interpretation as [the court] conduct[s its] initial analysis of the Act.”); Brackeen v. 

Haaland, 994 F.3d 249, 360 (5th Cir. 2021) (applying Mourning test in second step of 

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24

Chevron). Here, because the ECOA is unambiguous, the Court does not reach 

Chevron step two,10 and Mourning is inapplicable. 

The Seventh Circuit’s Muro decision does not revive Mourning’s significance 

either. In Muro, the Seventh Circuit reviewed a district court’s denial of class 

certification in an attempted TILA class action. 580 F.3d at 487. When interpreting 

Section 1637(a) of TILA, the court found that TILA was silent on “when an account 

is ‘open.’” Id. at 493. Having found a gap in the statute, the court looked to Regulation 

Z’s specification that initial disclosures must be made before the first transaction is 

made under the plan. Id. (citing 12 C.F.R. § 226.5(b)(1)). Dropping a footnote, the 

Seventh Circuit cited Mourning generally for the proposition that “[t]he provisions of 

Regulation Z are afforded substantial weight.” Id. at 493 n.9. So, although the court 

in Muro cited Mourning, Regulation Z was not under review, and even if it were, the 

court only looked to Mourning after the court had determined that Congress had been 

silent on the issue the court was concerned with. Muro in no way stands for the 

proposition that a court can avoid the Chevron framework in light of Mourning. 

In sum, the Chevron framework requires the Court to begin its analysis with 

the plain language of the ECOA. Because the Court finds the ECOA unambiguously 

prohibits discrimination of “applicants,” and not “prospective applicants,” the Court 

does not assess Regulation B for the soundness of its policy, the need for it in the 

10Because the Court does not reach Chevron step two, the CFPB’s arguments about legislative 

history and the ineffectiveness of the ECOA without Regulation B’s anti-discouragement 

provision, see Resp. at 4–5, 7–8, are inapposite. Coyomani-Cielo v. Holder, 758 F.3d 908, 914 

(7th Cir. 2014) (holding legislative history is reserved for Chevron’s second step, in which 

court deferentially determines whether the agency’s interpretation is reasonable). 

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statute, or even whether it is reasonably related to the ECOA’s objectives. To be clear, 

the Court appreciates the expertise of the CFPB in implementing the ECOA and 

commends its attempts to prevent the deplorable practice of discouraging people, on 

the basis of race, from applying for credit. The practice of limiting credit to individuals 

based on criteria other than creditworthiness is as odious as it is offensive. However, 

the Court is duty-bound to follow precedent, which means the Court can only defer to 

an agency’s interpretation of a statute, no matter how laudable its purpose, when it 

survives the two-step Chevron framework. The anti-discouragement provision of 

Regulation B with respect to “prospective applicants” does not survive Chevron step 

one, so the Court does not defer to the CFPB’s interpretation. 

Accordingly, the CFPB’s ECOA count is dismissed. The dismissal is with 

prejudice because any amendment would be futile. See Heng v. Heavner, Beyers & 

Mihlar, LLC, 849 F.3d 348, 354 (7th Cir. 2017). The CFPB cannot amend its pleading 

in a way that would change the language of the ECOA. Counts II and III, which are 

dependent on the CFPB’s ECOA claim, see FAC ¶¶ 59–78, are likewise dismissed 

with prejudice. 

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26

Conclusion 

For the foregoing reasons, the Court grants Defendants’ motion to dismiss the 

FAC [31] and dismisses the FAC with prejudice. Civil case terminated. 

Dated: February 3, 2023 

____________________________________ 

United States District Judge

Franklin U. Valderrama

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ILND 450 (Rev. 10/13) Judgment in a Civil Action

IN THE UNITED STATES DISTRICT COURT

FOR THE 

NORTHERN DISTRICT OF ILLINOIS

Bureau of Consumer Financial Protection, 

Plaintiff(s),

v.

Townstone Financial, Inc. and Barry Sturner,

Defendant(s).

Case No. 20 C 4176

Judge Franklin U. Valderrama

JUDGMENT IN A CIVIL CASE

Judgment is hereby entered (check appropriate box):

in favor of plaintiff(s)

and against defendant(s)

in the amount of $ ,

which includes pre–judgment interest. 

does not include pre–judgment interest.

Post-judgment interest accrues on that amount at the rate provided by law from the date of this judgment. 

Plaintiff(s) shall recover costs from defendant(s).

in favor of defendant(s) Townstone Financial, Inc. and Barry Sturner.

and against plaintiff(s) Bureau of Consumer Financial Protection.

Defendant(s) shall recover costs from plaintiff(s).

other:

This action was (check one):

tried by a jury with Judge presiding, and the jury has rendered a verdict. 

tried by Judge without a jury and the above decision was reached. 

decided by Judge Franklin U. Valderrama on a motion. 

Date: 2/3/2023 Thomas G. Bruton, Clerk of Court

Analeah Charles, Deputy Clerk

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APPEAL,CASREF,FUENTES,PROTO,TERMED

United States District Court

Northern District of Illinois - CM/ECF NextGen 1.7.1.1 (Chicago)

CIVIL DOCKET FOR CASE #: 1:20-cv-04176

Internal Use Only

Bureau of Consumer Financial Protection v. Townstone

Financial, Inc.

Assigned to: Honorable Franklin U. Valderrama

Cause: 28:1331 Federal Question: Other Civil Rights

Date Filed: 07/15/2020

Date Terminated: 02/03/2023

Jury Demand: None

Nature of Suit: 440 Civil Rights: Other

Jurisdiction: U.S. Government Plaintiff

Plaintiff

Bureau of Consumer Financial

Protection

represented by Barry E Reiferson

Bureau of Consumer Financial Protection

1700 G Street, NW

Washington, DC 20552

212-328-7020

Email: barry.reiferson@cfpb.gov

TERMINATED: 09/12/2022

LEAD ATTORNEY

PRO HAC VICE

Gregory Wood Jones

Consumer Financial Protection Bureau

Enforcement

230 S. Dearborn St.

Chicago, IL 60604

202-573-1372

Email: gregory.jones@cfpb.gov

LEAD ATTORNEY

ATTORNEY TO BE NOTICED

Vincent Paul Herman

Bureau of Consumer Financial Protection

1700 G Street, NW

Washington, DC 20552

(202) 435-9599

Email: vincent.herman@cfpb.gov

LEAD ATTORNEY

PRO HAC VICE

ATTORNEY TO BE NOTICED

Jacob Alden Schunk

Consumer Financial Protection Bureau

1700 G Street NW

Washington, DC 20552

CM/ECF NextGen Live 1.7.1.1 - U.S. District Court, Northern Illinois https://ilnd-ecf.sso.dcn/cgi-bin/DktRpt.pl?751192344146425-L_1_0-1

1 of 14 4/4/2023, 9:43 AM

Case: 1:20-cv-04176 Document #: 116 Filed: 04/04/23 Page 31 of 44 PageID #:716
(202) 718-0394

Email: jacob.schunk@cfpb.gov

PRO HAC VICE

ATTORNEY TO BE NOTICED

Karen Sarah Bloom

US Consumer Financial Protection Bureau

1700 G St NW

Washington, DC 20552

(202) 435-7012

Email: karen.bloom@cfpb.gov

PRO HAC VICE

ATTORNEY TO BE NOTICED

Mary Elizabeth Olson

Consumer Financial Protection Bureau

230 S. Dearborn Street

Suite 1590

Chicago, IL 60604

312 610-8977

Email: Mary.Olson@cfpb.gov

ATTORNEY TO BE NOTICED

Michael G. Salemi

Consumer Financial Protection Bureau

Attn: Salemi Enforcement

1700 G Street NW

Washington, DC 20552

(202) 435-7751

Email: michael.salemi@cfpb.gov

ATTORNEY TO BE NOTICED

V.

Defendant

Townstone Financial, Inc. represented by Sean Patrick Burke

Mattingly Burke Cohen & Biederman LLP

155 E Market St.

Suite 400

Indianapolis, IN 46204

(317) 614-7324

Email: sean.burke@mbcblaw.com

LEAD ATTORNEY

ATTORNEY TO BE NOTICED

Steve Simpson

Pacific Legal Foundation

3100 Clarendon Boulevard

Suite 1000

Arlington, VA 22201

CM/ECF NextGen Live 1.7.1.1 - U.S. District Court, Northern Illinois https://ilnd-ecf.sso.dcn/cgi-bin/DktRpt.pl?751192344146425-L_1_0-1

2 of 14 4/4/2023, 9:43 AM

Case: 1:20-cv-04176 Document #: 116 Filed: 04/04/23 Page 32 of 44 PageID #:717
916-775-6857

Email: ssimpson@pacificlegal.org

LEAD ATTORNEY

ATTORNEY TO BE NOTICED

Elinam Brenda Kpotufe

Mattingly Burke Cohen & Biederman Llp

155 East Market Street

Suite 400

Indianapolis, IN 46204

(317) 664-7094

Email: brenda.kpotufe@mbcblaw.com

ATTORNEY TO BE NOTICED

Jessica Thompson

Pacific Legal Foundation

3100 Clarendon Blvd. Suite 610

Arlington, VA 22201

(202) 888-6881

Email: jlthompson@pacificlegal.org

ATTORNEY TO BE NOTICED

John F Kerkhoff

Pacific Legal Foundation

3100 Clarendon Blvd.

Suite 610

Arlington, VA 22201

513-235-4509

Email: jkerkhoff@pacificlegal.org

ATTORNEY TO BE NOTICED

Marx David Sterbcow

Sterbcow Law Group, LLC

824 Elmwood Park Boulevard, Suite 205

New Orleans, LA 70123

5045234930

Email: marx@sterbcowlaw.com

PRO HAC VICE

ATTORNEY TO BE NOTICED

Oliver Dunford

Pacific Legal Foundation

4440 Pga Blvd., Suite 307

Palm Beach Gardens, FL 33410

(916) 503-9060

Email: odunford@pacificlegal.org

ATTORNEY TO BE NOTICED

Defendant

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Barry Sturner represented by Steve Simpson

(See above for address)

LEAD ATTORNEY

ATTORNEY TO BE NOTICED

Jessica Thompson

(See above for address)

ATTORNEY TO BE NOTICED

John F Kerkhoff

(See above for address)

ATTORNEY TO BE NOTICED

Oliver Dunford

(See above for address)

ATTORNEY TO BE NOTICED

Date Filed # Docket Text

07/10/2020 5 Fifth Amended General Order 20-0012 IN RE: CORONAVIRUS COVID-19

PUBLIC EMERGENCY Signed by the Chief Judge Rebecca R. Pallmeyer on July

10, 2020. This Order does not extend or modify any deadlines set in civil cases. No

motions may be noticed for in-person presentment; the presiding judge will notify

parties of the need, if any, for a hearing by electronic means or in-court proceeding.

See attached Order. Signed by the Honorable Rebecca R. Pallmeyer on 7/10/2020.

Mailed notice. (bg, ) (Entered: 07/16/2020)

07/15/2020 1 COMPLAINT filed by Bureau of Consumer Financial Protection; (Attachments: # 1

Exhibit)(Salemi, Michael) (Entered: 07/15/2020)

07/15/2020 2 CIVIL Cover Sheet (Salemi, Michael) (Entered: 07/15/2020)

07/15/2020 3 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Michael G. Salemi (Salemi, Michael) (Entered: 07/15/2020)

07/15/2020 CASE ASSIGNED to the Honorable Matthew F. Kennelly. Designated as

Magistrate Judge the Honorable Gabriel A. Fuentes. Case assignment: Random

assignment. (mp, ) (Entered: 07/15/2020)

07/16/2020 4 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Mary Elizabeth Olson (Olson, Mary) (Entered: 07/16/2020)

07/21/2020 6 MOTION by Plaintiff Bureau of Consumer Financial Protection for leave to appear

as Pro Hac Vice (Herman, Vincent) (Entered: 07/21/2020)

07/21/2020 7 MOTION by Plaintiff Bureau of Consumer Financial Protection for leave to appear

as Pro Hac Vice (Reiferson, Barry) (Entered: 07/21/2020)

07/21/2020 8 NOTICE of Motion by Barry E Reiferson for presentment of motion for leave to

appear 6 , motion for leave to appear 7 before Honorable Matthew F. Kennelly on

7/28/2020 at 09:30 AM. (Reiferson, Barry) (Entered: 07/21/2020)

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07/22/2020 9 MINUTE entry before the Honorable Matthew F. Kennelly: Motion of Vincent

Herman 6 and Barry Reiferson 7 to appear pro hac vice are granted. (mk) (Entered:

07/22/2020)

07/22/2020 10 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Vincent Paul Herman (Herman, Vincent) (Entered: 07/22/2020)

07/22/2020 11 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Barry E Reiferson (Reiferson, Barry) (Entered: 07/22/2020)

08/17/2020 12 WAIVER OF SERVICE returned executed by Bureau of Consumer Financial

Protection. Townstone Financial, Inc. waiver sent on 8/10/2020, answer due

10/9/2020. (Reiferson, Barry) (Entered: 08/17/2020)

09/22/2020 13 ATTORNEY Appearance for Defendant Townstone Financial, Inc. by Sean Patrick

Burke (Burke, Sean) (Entered: 09/22/2020)

09/28/2020 14 EXECUTIVE COMMITTEE ORDER: GENERAL ORDER 20-0027: Pursuant that

to the Executive Committee Order entered on September 23, 2020 the civil cases on

the attached list have been selected for reassignment to form the initial calendar of

the Honorable Franklin U. Valderrama; therefore IT IS HEREBY ORDERED that

the attached list of 371 cases be reassigned to the Honorable Franklin U.

Valderrama; and IT IS FURTHER ORDERED that all parties affected by this Order

must review the Honorable Franklin U. Valderrama's webpage on the Court's

website for the purpose of reviewing instructions regarding scheduling and case

management procedures; and IT IS FURTHER ORDERED that any civil case that

has been reassigned pursuant to this Order will not be randomly reassigned to create

the initial calendar of a new district judge for twelve months from the date of this

Order; and IT IS FURTHER ORDERED that the Clerk of Court is directed to add

the Honorable Franklin U. Valderrama to the Court's civil case assignment system

during the next business day, so that he shall receive a full share of such cases. Case

reassigned to the Honorable Franklin U. Valderrama for all further proceedings.

Honorable Matthew F. Kennelly no longer assigned to the case. Signed by

Honorable Rebecca R. Pallmeyer on 9/28/2020.(Clerk6, Docket) (Entered:

09/28/2020)

10/05/2020 15 MOTION by Defendant Townstone Financial, Inc. for extension of time to file

answer regarding complaint 1 (Burke, Sean) (Entered: 10/05/2020)

10/06/2020 16 MINUTE entry before the Honorable Franklin U. Valderrama: Defendant's

uncontested motion for extension of time 15 is granted. Defendant's responsive

pleading due on or before 10/23/2020. Mailed notice (cn). (Entered: 10/06/2020)

10/06/2020 17 ATTORNEY Appearance for Defendant Townstone Financial, Inc. by Elinam

Brenda Kpotufe (Kpotufe, Elinam) (Entered: 10/06/2020)

10/20/2020 18 MOTION by Defendant Townstone Financial, Inc. for leave to file excess pages in

their memorandum in support of motion to dismiss Plaintiff's complaint (Kpotufe,

Elinam) (Entered: 10/20/2020)

10/21/2020 19 MINUTE entry before the Honorable Franklin U. Valderrama: Defendant's

unopposed motion for leave to exceed page limits related to their motion to dismiss

plaintiff's complaint 18 is granted. Defendant has leave to file a memorandum up to

20 pages in support of their motion to dismiss. Mailed notice (cn). (Entered:

10/21/2020)

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10/23/2020 20 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 150, receipt number

0752-17572246. (Sterbcow, Marx) (Entered: 10/23/2020)

10/23/2020 21 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Defendant

Townstone Financial, Inc. (Burke, Sean) (Entered: 10/23/2020)

10/23/2020 22 MEMORANDUM by Townstone Financial, Inc. in support of Motion to Dismiss

for Failure to State a Claim 21 (Burke, Sean) (Entered: 10/23/2020)

10/26/2020 23 MINUTE entry before the Honorable Franklin U. Valderrama: Attorney Marx

David Sterbcow's motion for leave to appear pro hac vice 20 is granted. Mailed

notice (axc). (Entered: 10/26/2020)

10/26/2020 24 MINUTE entry before the Honorable Franklin U. Valderrama: The Court sets the

following briefing schedule on defendant's motion to dismiss 21 : plaintiff's

response due on or before 11/16/2020; defendant's reply due on or before

11/23/2020. Telephonic status hearing set for 1/21/2021 at 9:45 a.m. The call-in

number is (888) 808-6929 and the access code is 5348076. Persons granted remote

access to proceedings are reminded of the general prohibition against

photographing, recording, and rebroadcasting of court proceedings. Violation of

these prohibitions may result in sanctions, including removal of court issued media

credentials, restricted entry to future hearings, denial of entry to future hearings, or

any other sanctions deemed necessary by the Court. Mailed notice (axc). (Entered:

10/26/2020)

10/30/2020 25 MOTION by Plaintiff Bureau of Consumer Financial Protection for extension of

time to file response/reply as to Motion to Dismiss for Failure to State a Claim 21 ,

MOTION by Plaintiff Bureau of Consumer Financial Protection for leave to file

excess pages (Reiferson, Barry) (Entered: 10/30/2020)

11/02/2020 26 MINUTE entry before the Honorable Franklin U. Valderrama: Uncontested motion

for extension of time and for leave to exceed page limit 25 is granted. Plaintiff's

response to the motion to dismiss or amended complaint due on or before

11/25/2020. Plaintiff has leave to file a response brief of up to 25 pages. Defendant's

reply if necessary due by 12/16/2020. If plaintiff files an amended complaint,

defendant's responsive pleading due by 1/15/2021. Telephonic status hearing set for

1/21/2021 is stricken and reset to 2/17/2021 at 9:30 a.m. The call-in number is (888)

808-6929 and the access code is 5348076. Persons granted remote access to

proceedings are reminded of the general prohibition against photographing,

recording, and rebroadcasting of court proceedings. Violation of these prohibitions

may result in sanctions, including removal of court issued media credentials,

restricted entry to future hearings, denial of entry to future hearings, or any other

sanctions deemed necessary by the Court. Replies due by 12/16/2020. Telephone

Conference set for 2/17/2021 at09:30 AM. Mailed notice (axc). (Entered:

11/02/2020)

11/25/2020 27 AMENDED complaint by Bureau of Consumer Financial Protection against

Townstone Financial, Inc., Barry Sturner (Reiferson, Barry) (Entered: 11/25/2020)

12/21/2020 28 WAIVER OF SERVICE returned executed by Bureau of Consumer Financial

Protection. Barry Sturner waiver sent on 12/8/2020, answer due 2/8/2021.

(Reiferson, Barry) (Entered: 12/21/2020)

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01/08/2021 29 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time (Joint), MOTION by Defendants Barry Sturner, Townstone Financial, Inc.

leave to exceed the page limits (Joint) (Burke, Sean) (Entered: 01/08/2021)

01/11/2021 30 MINUTE entry before the Honorable Franklin U. Valderrama: The parties' joint

motion for extension of time and for leave to exceed page limits for consolidated

briefing on motions to dismiss 29 . The motion is granted as follows: the briefing

schedules set by 24 and 26 are hereby stricken; the parties will adhere to a

consolidated briefing schedule on the defendants' forthcoming motion to dismiss;

defendants' consolidated motion to dismiss due on or before 2/8/2021; Bureau's

consolidated response due on or before 3/1/2021; defendants' reply due on or before

3/11/2021; defendants' memorandum in support of their consolidated motion to

dismiss may be up to 25 pages; Bureau's consolidated response may be up to 30

pages; defendants' consolidated reply may be up to 10 pages. Telephonic status

hearing set on 2/17/2021 at 9:30 a.m. is hereby stricken. Status hearing set for

5/4/2021 at 9:30 a.m. but to track the case only (no appearance is required; the case

will not be called). Mailed notice (axc). (Entered: 01/11/2021)

02/08/2021 31 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Defendants

Barry Sturner, Townstone Financial, Inc. (Burke, Sean) (Entered: 02/08/2021)

02/08/2021 32 MEMORANDUM by Barry Sturner, Townstone Financial, Inc. in support of

Motion to Dismiss for Failure to State a Claim 31 (Burke, Sean) (Entered:

02/08/2021)

02/25/2021 33 MOTION by Plaintiff Bureau of Consumer Financial Protection for extension of

time to file response/reply as to Motion to Dismiss for Failure to State a Claim 31

(Unopposed Motion) (Reiferson, Barry) (Entered: 02/25/2021)

02/26/2021 34 MINUTE entry before the Honorable Franklin U. Valderrama: The unopposed

motion for extension of time to respond and reply to motion to dismiss 33 is

granted. The briefing scheduling set forth on 1/11/2021 30 is modified as follows:

Bureau's consolidated response due on or before 3/15/2021; defendants' reply due

on or before 3/29/2021. Status hearing set for 5/4/2021 is stricken and reset to

5/27/2021 at 9:30 a.m. but to track the case only (no appearance is required; the

case will not be called). Mailed notice (axc). (Entered: 02/26/2021)

03/15/2021 35 RESPONSE by Bureau of Consumer Financial Protectionin Opposition to

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Defendants

Barry Sturner, Townstone Financial, Inc. 31 (Reiferson, Barry) (Entered:

03/15/2021)

03/24/2021 36 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to file response/reply to Plaintiff's Opposition to Motion to Dismiss, MOTION

by Defendants Barry Sturner, Townstone Financial, Inc. for leave to file excess

pages (Kpotufe, Elinam) (Entered: 03/24/2021)

03/25/2021 37 MINUTE entry before the Honorable Franklin U. Valderrama: Defendants'

unopposed motion for extension of time and for leave to exceed page limits for

reply to plaintiff's opposition to motion to dismiss 36 is granted. Defendants' are

hereby granted leave to exceed the page limit by 3 pages, up to and including 13

pages total, for their consolidated reply. The briefing schedule entered on 2/26/2021

34 is modified as follows: defendants' reply due on or before 4/12/2021. Status

hearing set for 5/27/2021 is stricken and reset to 6/10/2021 at 9:30 a.m. but to track

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the case only (no appearance is required; the case will not be called) Mailed notice

(axc). (Entered: 03/25/2021)

04/12/2021 38 REPLY by Barry Sturner, Townstone Financial, Inc. to response in opposition to

motion 35 to dismiss Plaintiff's Complaint (Burke, Sean) (Entered: 04/12/2021)

06/04/2021 39 MINUTE entry before the Honorable Franklin U. Valderrama: Tracking status set

for 6/10/2021 is stricken. The Court will rule on Defendant Townstone Financial,

Inc.'s Motion to Dismiss Plaintiff's Complaint 21 and Defendants' Combined

Motion to Dismiss Plaintiff's Complaint 31 via CM/ECF. Mailed notice (axc).

(Entered: 06/04/2021)

11/23/2021 40 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to file Report from Rule 26(f) Conference (Burke, Sean) (Entered: 11/23/2021)

11/29/2021 41 MINUTE entry before the Honorable Franklin U. Valderrama: For the reasons

stated in Defendants' Unopposed Motion to Extend Time 40 , the motion is granted.

The deadline for the parties to file their Rule 26(f) report is extended to 12/27/2021.

Mailed notice (axc). (Entered: 11/29/2021)

12/20/2021 42 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to File Report From Rule 26(f) Conference (Burke, Sean) (Entered:

12/20/2021)

12/22/2021 43 MINUTE entry before the Honorable Franklin U. Valderrama: For the reasons

stated in the motion, Defendants' Unopposed Motion to Extend Time 42 is granted.

The deadline for the parties to file their Rule 26(f) report is extended to 01/26/2022.

Defendant's Motion to Dismiss 21 is further stricken as moot in light of the filing of

the Amended Complaint 27 . The Court refers discovery supervision, including

setting all deadlines, and settlement matters to Magistrate Judge Fuentes. The Court

anticipates discovery will continue while Defendant's Motion to Dismiss the

Amended Complaint 31 is pending. If the parties request a stay of discovery, they

are to bring that motion before the District Court Judge. Without a stay, it is

expected that discovery work will continue. Mailed notice (axc). (Entered:

12/22/2021)

12/22/2021 44 Pursuant to Local Rule 72.1, this case is hereby referred to the calendar of

Honorable Gabriel A. Fuentes for the purpose of holding proceedings related to:

discovery supervision, including setting all deadlines, and settlement matters. (axc)

Mailed notice. (Entered: 12/22/2021)

12/22/2021 45 MINUTE entry before the Honorable Gabriel A. Fuentes: This matter coming

before the magistrate judge on referral for discovery supervision and settlement

(doc. # 44 ), the Court directs the parties to include in their written status report due

on 1/26/22 the status of their settlement discussions and a proposed schedule for

written and oral discovery. Meanwhile, the Court refers the parties to the Court's

Standing Order for Civil Cases Before Magistrate Judge Fuentes, the Standing

Order for Settlement Conferences, and the Top Ten Ways to Defeat Settlement, all

available on the Court's website. Mailed notice (dal, ) (Entered: 12/22/2021)

01/25/2022 46 MINUTE entry before the Honorable Gabriel A. Fuentes: The Court has received

notice by email of the parties having reached an agreement in principle to settle the

matter, with a plan to submit a proposed judgment and order within 14 days.

Accordingly, the 1/26/22 status report date is vacated and reset to 2/25/22 and will

be vacated if the matter is fully resolved by then. Mailed notice. (jj, ) (Entered:

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02/24/2022 47 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to File Status Report (Burke, Sean) (Entered: 02/24/2022)

02/25/2022 48 MINUTE entry before the Honorable Gabriel A. Fuentes: The Court grants the

parties' joint motion (doc. # 47 ) to continue the status report due date from today to

noon on 3/4/22. Mailed notice. (jj, ) (Entered: 02/25/2022)

03/03/2022 49 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to File Status Report (Burke, Sean) (Entered: 03/03/2022)

03/03/2022 50 MINUTE entry before the Honorable Gabriel A. Fuentes: Defendant's agreed

motion to extend the time for their status report on finalization of settlement (doc. #

49 ) is granted, and the next status report is due and to be filed by noon on 3/18/22,

but the parties are strongly encouraged to use that time to focus on completing the

settlement, and not obtaining pro bono litigation counsel if the settlement does not

materialize. If there is no settlement, the matter will return to the uncertainty of the

litigation portal and may ask the Court for whatever time they think they need to

find more lawyers and spend more resources on litigation. Mailed notice. (jj, )

(Entered: 03/03/2022)

03/18/2022 51 STATUS Report (Joint) by Barry Sturner, Townstone Financial, Inc. (Burke, Sean)

(Entered: 03/18/2022)

03/18/2022 52 MINUTE entry before the Honorable Gabriel A. Fuentes: With the parties in the

joint status report (doc. # 51 ) disclosing to the Court that the settlement in

principle, previously reached, is now off and could not be finalized, discovery will

proceed. The parties are ordered to engage in a Rule 26(f) conference by close of

business on 3/25/22, and they shall file a joint status report disclosing an agreed or

contested schedule for fact and expert discovery no later than noon on 4/1/22. The

Court expects that Rule 26(a)(1) disclosures will be due to be served 14 days after

the Rule 26(f) conference. Mailed notice (lp, ) (Entered: 03/18/2022)

03/23/2022 53 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for extension of

time to extend the deadlines established by the Court's March 18, 2022 Order

(Burke, Sean) (Entered: 03/23/2022)

03/24/2022 54 ATTORNEY Appearance for Defendants Barry Sturner, Townstone Financial, Inc.

by Jessica Thompson (Thompson, Jessica) (Entered: 03/24/2022)

03/24/2022 55 ATTORNEY Appearance for Defendants Barry Sturner, Townstone Financial, Inc.

by Steve Simpson (Simpson, Steve) (Entered: 03/24/2022)

03/24/2022 56 MINUTE entry before the Honorable Gabriel A. Fuentes: Defendant's unopposed

motion for a two-week extension of the discovery schedule after failed settlement

efforts (doc. # 53 ) is granted in view of new counsel's entry into the case. By

agreement, Rule 26(f) conference is to occur on or before 4/8/22, the joint Rule

26(f) status report is due and to be filed by noon on 4/22/22 and not 4/1/22, and

Rule 26(a)(1) disclosures are to be served by no later than 4/22/22.Mailed notice.

(jj, ) (Entered: 03/24/2022)

03/28/2022 57 ATTORNEY Appearance for Defendants Barry Sturner, Townstone Financial, Inc.

by Oliver Dunford (Dunford, Oliver) (Entered: 03/28/2022)

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04/18/2022 58 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 150, receipt number

0752-19351472. (Schunk, Jacob) (Entered: 04/18/2022)

04/18/2022 59 REQUEST for Clerk of Court to refund filing fee in the amount of $150, receipt no.

0752-19351472, regarding motion to appear pro hac vice 58 (Schunk, Jacob)

(Entered: 04/18/2022)

04/21/2022 60 MINUTE entry before the Honorable Franklin U. Valderrama: Attorney Jacob A.

Schunk's motion for leave to appear pro hac vice 58 is granted. Mailed notice (axc).

(Entered: 04/21/2022)

04/22/2022 61 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Jacob Alden Schunk (Schunk, Jacob) (Entered: 04/22/2022)

04/22/2022 62 REPORT of Rule 26(f) Planning Meeting by Bureau of Consumer Financial

Protection (Schunk, Jacob) (Entered: 04/22/2022)

04/22/2022 63 REFUND PROCESSED to attorney Jacob Schunk in the amount of $150, receipt

no. 0752-19351472, regarding motion to appear pro hac vice 58 due to filing on

behalf of a federal agency. (sm, ) (Entered: 04/22/2022)

04/26/2022 64 MINUTE entry before the Honorable Gabriel A. Fuentes: On review of the parties'

Rule 26(f) report (doc. # 62 ), the Court orders the following under the discovery

referral: (1) service of Rule 26(a)(1) disclosures is presumed to have taken place on

4/22/22 as proposed, and if it has not, the disclosures should be served forthwith;

(2) initial written discovery requests are to be served by no later than 5/6/22, with

responses due per the rules or by agreement; and (3) fact discovery is to be

completed by no later than 12/23/22 as proposed. On expert discovery, certain of the

parties' proposed time frames between expert disclosures and depositions are too

long. Plaintiff's expert disclosures are due to be served on 1/27/23 as proposed, but

those depositions are to be concluded by 3/31/23. Defendant's expert disclosures are

due to be served by no later than 3/3/23, with those experts deposed by no later than

5/5/23. All discovery is therefore closed on 5/5/23, and this schedule should be

considered firm. This is a 2020 case in which both sides have had ample time to

consider the subject matter and witness candidates with respect to expert testimony;

considerable time was spent on settlement, and that is commendable, but now that

settlement is not in the offing, the parties have opted for the litigation train, and it is

moving, and it will pick up speed. If at any time the parties wish to discuss

settlement with the magistrate judge, they should feel free to contact the courtroom

deputy, Jenny Jauregui, at 312-818-6514. The parties may address deadlines for

amended pleadings and dispositive motions with the district court. Mailed notice.

(jj, ) (Entered: 04/26/2022)

07/08/2022 65 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for leave to file

Notice of Supplemental Authority (Simpson, Steve) (Entered: 07/08/2022)

07/11/2022 66 MINUTE entry before the Honorable Franklin U. Valderrama: For the reasons

stated in the motion, the Court grants Defendants' motion for leave to file notice of

supplemental authority 65 . Defendants shall file their notice of supplemental

authority on or before 07/25/2022; Plaintiff shall file a response on or before

08/08/2022. Mailed notice (axc). (Entered: 07/11/2022)

07/25/2022 67 MEMORANDUM by Barry Sturner, Townstone Financial, Inc. re Supplemental

Authority (ECF Nos. 65 and 66) (Simpson, Steve) (Entered: 07/25/2022)

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07/27/2022 68 MINUTE entry before the Honorable Franklin U. Valderrama: The Court sets an InPerson motion hearing on Defendants' Combined Motion to Dismiss Plaintiff's

Complaint 31 for 08/10/2022 at 10:00 a.m. The hearing will be held in Judge

Valderrama's Courtroom 1219. Mailed notice (axc). (Entered: 07/27/2022)

08/04/2022 69 MOTION by Plaintiff Bureau of Consumer Financial Protection for Leave to

Appear Pro Hac Vice (Bloom, Karen) (Entered: 08/04/2022)

08/05/2022 70 Amended Motion for Leave to Appear Pro Hac Vice by Bureau of Consumer

Financial Protection (Bloom, Karen) (Entered: 08/05/2022)

08/08/2022 71 RESPONSE by Plaintiff Bureau of Consumer Financial Protection to memorandum

67 (Reiferson, Barry) (Entered: 08/08/2022)

08/09/2022 72 MINUTE entry before the Honorable Franklin U. Valderrama: Attorney Karen S.

Bloom's amended motion for leave to appear pro hac vice 70 is granted. Mailed

notice (axc). (Entered: 08/09/2022)

08/09/2022 73 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Karen Sarah Bloom (Bloom, Karen) (Entered: 08/09/2022)

08/11/2022 74 MINUTE entry before the Honorable Franklin U. Valderrama: In-Person Motion

Hearing held on 08/10/2022 on Defendants' Combined Motion to Dismiss Plaintiff's

Complaint 31 . The Court will issue an opinion on the motion via CM/ECF. Mailed

notice (axc). (Entered: 08/11/2022)

09/09/2022 75 MOTION by Attorney Barry Reiferson to withdraw as attorney for Bureau of

Consumer Financial Protection. No party information provided (Reiferson, Barry)

(Entered: 09/09/2022)

09/12/2022 76 MINUTE entry before the Honorable Franklin U. Valderrama: For the reasons

stated in the motion, the Court grants Barry E. Reiferson's Motion to Withdraw 75 .

Attorney Barry E. Reiferson, is withdrawn as counsel for Plaintiff, Bureau of

Consumer Financial Protection. Mailed notice (axc). (Entered: 09/12/2022)

09/16/2022 77 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. to stay discovery

(Simpson, Steve) (Entered: 09/16/2022)

09/16/2022 78 MEMORANDUM by Barry Sturner, Townstone Financial, Inc. in support of motion

to stay 77 discovery. (Simpson, Steve) (Entered: 09/16/2022)

09/19/2022 79 MINUTE entry before the Honorable Gabriel A. Fuentes: On defendants' motion to

stay discovery (doc. # 77 ), the magistrate defers action to the district court, which

reserved the authority to decide discovery stay motion in this matter (doc. # 43 ).

Mailed notice. (jj, ) (Entered: 09/19/2022)

09/20/2022 80 MINUTE entry before the Honorable Franklin U. Valderrama: The Court enters the

following briefing schedule on Defendant's motion to stay discovery 77 : Plaintiff's

response is due on or before 10/11/2022; Defendants' reply is due on or before

10/25/2022. Mailed notice (axc). (Entered: 09/20/2022)

09/27/2022 81 ATTORNEY Appearance for Plaintiff Bureau of Consumer Financial Protection by

Gregory Wood Jones (Jones, Gregory) (Entered: 09/27/2022)

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10/11/2022 82 RESPONSE by Bureau of Consumer Financial Protectionin Opposition to

MOTION by Defendants Barry Sturner, Townstone Financial, Inc. to stay discovery

77 (Schunk, Jacob) (Entered: 10/11/2022)

10/25/2022 83 REPLY by Defendants Barry Sturner, Townstone Financial, Inc. (Simpson, Steve)

(Entered: 10/25/2022)

10/31/2022 84 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. for order Entry

of Agreed Confidentiality Order (Simpson, Steve) (Entered: 10/31/2022)

10/31/2022 85 MINUTE entry before the Honorable Gabriel A. Fuentes: The parties' joint motion

for entry of an Agreed Confidentiality Order (doc. #84) is granted. Enter Agreed

Confidentiality Order. Mailed notice (lxs, ) (Entered: 10/31/2022)

10/31/2022 86 AGREED Confidentiality Order. Signed by the Honorable Gabriel A. Fuentes on

10/31/2022. Mailed notice(lxs, ) (Entered: 10/31/2022)

11/14/2022 87 MOTION by Plaintiff Bureau of Consumer Financial Protection to compel

(Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B, # 3 Exhibit Exhibit C, #

4 Exhibit Exhibit D, # 5 Exhibit Exhibit E)(Jones, Gregory) (Entered: 11/14/2022)

11/14/2022 88 MINUTE entry before the Honorable Gabriel A. Fuentes: On plaintiff's motion to

compel (doc. # 87 ), a telephonic motion hearing is set for 3 p.m. on 11/16/22. The

parties should be prepared to argue the motion at that time. The call-in number is

(888) 684-8852 and the access code is 2006804. Persons granted remote access to

proceedings are reminded of the general prohibition against photographing,

recording, and rebroadcasting of court proceedings. Participants are further directed

to keep their devices muted when they are not speaking. Mailed notice. (jj, )

(Entered: 11/14/2022)

11/14/2022 89 MOTION by Defendants Barry Sturner, Townstone Financial, Inc. to compel

discovery responses (Attachments: # 1 Exhibit A - CFPB Response to Rog No. 2, #

2 Exhibit B - Letter to CFPB, Aug. 23, 2022, # 3 Exhibit C - D. RFP 34-38, 41, 42,

# 4 Exhibit D - CFPB Responses, June 10, 2022, # 5 Exhibit E - Letter to CFPB,

Oct. 10, 2022, # 6 Exhibit F - Letter to CFPB, Nov. 3, 2022, # 7 Declaration of

Barry Sturner)(Simpson, Steve) (Entered: 11/14/2022)

11/14/2022 90 MEMORANDUM by Barry Sturner, Townstone Financial, Inc. in support of motion

to compel, 89 (Simpson, Steve) (Entered: 11/14/2022)

11/15/2022 91 MINUTE entry before the Honorable Gabriel A. Fuentes: Upon filing of defendants'

motion to compel (doc. # 89 ), the telephonic motion hearing set for 3 p.m. on

11/16/22 (doc. # 88 ) stands and is expanded to include defendants' motion to

compel. Mailed notice. (kl, ) (Entered: 11/15/2022)

11/15/2022 92 MINUTE entry before the Honorable Franklin U. Valderrama: The Court refers

Defendants' motion to stay discovery 77 to Magistrate Judge Fuentes. Mailed notice

(axc). (Entered: 11/15/2022)

11/16/2022 93 MINUTE entry before the Honorable Gabriel A. Fuentes: Telephonic motion

hearing held on plaintiff's motion to compel (doc. # 87 ) and defendants' motion to

compel (doc. # 89 ). The Court determined that further briefing of these motions by

agreement is appropriate. The defense response to plaintiff's motion to compel, and

plaintiff's response to defendants' motion to compel, are due by 5 p.m. on 11/23/22.

Replies in support of the respective motions to compel are due from each movant by

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5 p.m. on 12/2/22. The Court will issue a further order upon review of the briefing.

Mailed notice. (kl, ) (Entered: 11/16/2022)

11/18/2022 94 ATTORNEY Appearance for Defendants Barry Sturner, Townstone Financial, Inc.

by John F Kerkhoff (Kerkhoff, John) (Entered: 11/18/2022)

11/18/2022 95 MOTION by Plaintiff Bureau of Consumer Financial Protection for extension of

time to file response/reply as to motion to compel 87 , motion hearing,,, set motion

and R&R deadlines/hearings,, 93 , motion to compel, 89 (Joint Motion) (Schunk,

Jacob) (Entered: 11/18/2022)

11/18/2022 96 MINUTE entry before the Honorable Gabriel A. Fuentes: The parties' joint motion

for an extension of time to brief their respective motions to compel (doc. #95) is

granted. Respective responses to the motions to compel are due by 5 p.m. on

11/30/22, and the respective replies are due by 5 p.m. on 12/7/22. Mailed notice. (kl,

) (Entered: 11/18/2022)

11/22/2022 97 MOTION by Plaintiff Bureau of Consumer Financial Protection for extension of

time to complete discovery (Joint Motion) (Schunk, Jacob) (Entered: 11/22/2022)

11/23/2022 98 MINUTE entry before the Honorable Gabriel A. Fuentes: The parties' joint motion

to extend the discovery schedule (doc. # 97 ) is taken under advisement along with

the pending motion to stay discovery. Mailed notice. (lxk, ) (Entered: 11/23/2022)

11/30/2022 99 RESPONSE by Bureau of Consumer Financial Protectionin Opposition to

MOTION by Defendants Barry Sturner, Townstone Financial, Inc. to compel

discovery responses 89 (Schunk, Jacob) (Entered: 11/30/2022)

11/30/2022 100 RESPONSE by Barry Sturner, Townstone Financial, Inc. to MOTION by Plaintiff

Bureau of Consumer Financial Protection to compel 87 (Attachments: # 1 Exhibit

Declaration)(Simpson, Steve) (Entered: 11/30/2022)

12/07/2022 101 REPLY by Bureau of Consumer Financial Protection to MOTION by Plaintiff

Bureau of Consumer Financial Protection to compel 87 , response to motion 100

(Jones, Gregory) (Entered: 12/07/2022)

12/07/2022 102 RESPONSE by Barry Sturner, Townstone Financial, Inc.in Support of MOTION by

Defendants Barry Sturner, Townstone Financial, Inc. to compel discovery responses

89 (Attachments: # 1 Exhibit)(Simpson, Steve) (Entered: 12/07/2022)

12/12/2022 103 MINUTE entry before the Honorable Gabriel A. Fuentes: Defendants' motion to

stay discovery (doc. # 77 ) is denied, the CFPB motion to compel discovery (doc. #

87 ) and the defendants' motion to compel discovery (doc. # 89 ) are partially denied

and partially granted, and the motion to extend the discovery schedule (doc. # 97 )

is granted, all as stated and for the reasons stated in the accompanying order. Enter

Order. The new discovery schedule is as follows: (1) the fact discovery cutoff is

2/28/23, (2) Rule 26(a)(2) expert reports are due to be served by CFPB no later than

5 p.m. on 3/24/23 and by defendants no later than 5 p.m. on 4/28/23, and (3) expert

depositions are to be completed no later than 5/26/23 for CFPB's experts and

6/30/23 for defendants' experts, with all discovery closing on 6/30/23. The parties

should consider this schedule firm. A joint written status report on the anticipated

closure of fact discovery is due by noon on 2/23/23. Mailed notice. (lxk, ) (Entered:

12/12/2022)

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12/12/2022 104 ORDER Signed by the Honorable Gabriel A. Fuentes on 12/12/2022. Mailed notice.

(lxk, ) (Entered: 12/12/2022)

12/27/2022 105 OBJECTIONS by Barry Sturner, Townstone Financial, Inc. to order 104 (Simpson,

Steve) (Entered: 12/27/2022)

12/29/2022 106 MINUTE entry before the Honorable Franklin U. Valderrama: The Court sets the

following briefing schedule on Defendants' rule 72(a) objection to the magistrate's

order 105 : Plaintiff's response due on or before 01/11/2023; Defendants' reply due

on or before 01/18/2023. Emailed notice (axc). (Entered: 12/29/2022)

01/03/2023 107 MINUTE entry before the Honorable Gabriel A. Fuentes: Defendants have filed a

Rule 72(a) objection (doc. # 105 ) to the Court's 12/12/22 order (doc. # 104 ) with

the district judge, and the parties are currently litigating the objection in the

ordinary course under the district court's briefing schedule (doc. #106). Upon

further consideration, the magistrate judge views defendants' objection to the

Court's refusal to compel responses to Document Request No. 41, which called on

plaintiff to produce documents "concerning the political leaning, political

viewpoints, or social commentary of Townstone and/or Townstone's staff," as welltaken on the ground that the Request No. 41 is directed at documents, if any exist,

concerning the CFPB's consideration of defendants' political leanings, and not at

documents concerning the political leanings of CFPB staff members themselves.

The foregoing is provided for the district court's information. The parties are

directed to file a status report within three days of the district court's decision on

defendants' Rule 72(a) objection. Mailed notice. (lxk, ) (Entered: 01/03/2023)

01/11/2023 108 RESPONSE by Plaintiff Bureau of Consumer Financial Protection to objections 105

(Schunk, Jacob) (Entered: 01/11/2023)

01/18/2023 109 REPLY by Defendants Barry Sturner, Townstone Financial, Inc. to objections 105

(Simpson, Steve) (Entered: 01/18/2023)

02/03/2023 110 MEMORANDUM Opinion and Order: For the reasons in the accompanying

Opinion, the Court grants Defendants' motion to dismiss 31 and dismisses the first

amended complaint with prejudice. Civil case terminated. Signed by the Honorable

Franklin U. Valderrama on 2/3/2023. Emailed notice (axc). (Entered: 02/03/2023)

02/03/2023 111 ENTERED JUDGMENT on 2/3/2023. Emailed notice (axc) (Entered: 02/03/2023)

02/03/2023 112 MINUTE entry before the Honorable Gabriel A. Fuentes: The district court having

granted defendants' motion to dismiss and having entered judgment in the case (doc.

#s 110, 111 ) and with failed settlement efforts (doc. #52), the referral is terminated.

The discovery schedule and status report deadline of 2/23/23 are vacated. Judge

Honorable Gabriel A. Fuentes no longer referred to the case. Mailed notice. (lxk, )

(Entered: 02/03/2023)

04/03/2023 113 NOTICE of appeal by Bureau of Consumer Financial Protection regarding orders

110 , 111 Receipt number: y (Schunk, Jacob) (Entered: 04/03/2023)

04/03/2023 114 DOCKETING Statement by Bureau of Consumer Financial Protection regarding

notice of appeal 113 (Schunk, Jacob) (Entered: 04/03/2023)

04/04/2023 115 NOTICE of Appeal Due letter sent to counsel of record regarding notice of appeal

113 (axk, ) (Entered: 04/04/2023)

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