Trump DOJ Proposes $68M Colony Ridge Settlement: No Compensation for Hispanic Victims of Predatory Lending

The Colony Ridge development, located in the far north Houston suburbs, allegedly targeted Hispanic applicants with high-interest loans through false advertising and deceptive practices, according to a lawsuit filed by the U.S. Justice Department in December 2023. The case, described as a landmark for the Biden administration, accused the developer of operating a “one-stop shop for discriminatory lending.”

Kristen Clarke, assistant attorney general for civil rights, stated at a news conference announcing the lawsuit:

“Our goal at the end of the day is to ensure that victims are compensated for their loss.”

Three years later, the Trump administration and Colony Ridge are nearing a resolution. However, the proposed $68 million settlement includes no monetary compensation for the victims. Instead, $20 million is earmarked for policing and immigration enforcement—funds that former government officials warn could be used against the very individuals harmed by the developer’s alleged scheme.

Elena Babinecz, who led fair lending investigations at the Consumer Financial Protection Bureau (CFPB) for 12 years under the Obama, Trump, and Biden administrations, criticized the agreement:

“I’ve never seen a settlement like this, with a complete misalignment between what you’re settling and what the resolution is. It’s a slap in the face to the individuals that were harmed; that the Justice Department acknowledges were harmed. It’s a complete misjustice, and it’s not at all why these civil rights laws were passed.”

Babinecz, who was involved in the case when the CFPB joined the Justice Department in filing suit against Colony Ridge, added:

“It’s not justice for the victims.”

The proposed settlement is the largest Justice Department case since at least 2018 to include no monetary compensation for victims. A U.S. district judge must still approve the agreement, with a hearing scheduled for Friday.

Seven former attorneys and investigators who enforced federal lending and housing civil rights laws also expressed shock at the deal. A coalition of fair housing and civil rights groups has urged the court to reject the settlement, arguing that the lawsuit represents the only realistic chance for many consumers to receive recompense, as they cannot afford private attorneys.

The Justice Department had built its case against Colony Ridge with “stark and overwhelming evidence,” Clarke told reporters.

Key Details:

• Case Origin: Filed in December 2023 by the U.S. Justice Department under the Biden administration.
• Allegations: Colony Ridge targeted Hispanic applicants with high-interest, unaffordable loans and benefited from foreclosures.
• Proposed Settlement: $68 million total, with $20 million allocated to policing and immigration enforcement.
• Victim Compensation: No direct monetary compensation for victims in the proposed deal.
• Next Steps: A U.S. district judge will review the settlement in a hearing scheduled for Friday.