“Slap in the face”: Trump DOJ plans to settle predatory lending case without compensating victims |
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“Slap in the face”: Trump DOJ plans to settle predatory lending case without compensating victims
Unprecedented settlement offer could target the very people who were harmed by the developer
Published April 12, 2026 6:00AM (EDT)
This article originally appeared on ProPublica.
In December 2023, the U.S. Justice Department sued a Texas land developer it accused of duping tens of thousands of Hispanic residents into predatory mortgages, a landmark case for the Biden administration.
Colony Ridge, which sold plots in massive subdivisions north of Houston, had become a “one-stop shop for discriminatory lending,” Kristen Clarke, assistant attorney general for civil rights, said at a news conference announcing the lawsuit. The developer targeted Hispanic applicants through false advertising and persuaded them to take out high-interest loans that many could not afford, then benefited when it foreclosed on their properties, the lawsuit alleged.
“Our goal at the end of the day is to ensure that victims are compensated for their loss,” Clarke declared.
Three years later, the Trump administration and Colony Ridge are on the verge of resolving the case. But the $68 million proposed settlement provides no money for victims of the alleged scheme. Instead, it sets aside $20 million for policing and immigration enforcement — a provision that may be used to target the very people who were victimized by the developer, according to former government officials who worked on such cases.
“I’ve never seen a settlement like this, with a complete misalignment between what you’re settling and what the resolution is,” said Elena Babinecz, who led fair lending investigations at the Consumer Financial Protection Bureau for 12 years under the Obama, Trump and Biden administrations, before leaving in October.
“It’s a slap in the face to the individuals that were harmed; that the Justice Department acknowledges were harmed,” said Babinecz, who was at the bureau when it joined the Justice Department in filing suit against Colony Ridge. “It’s a complete misjustice, and it’s not at all why these civil rights laws were........