The Consumer Financial Protection Bureau, the Department of Justice, and Colony Ridge jointly asked a federal judge in Houston on Tuesday to pause the government’s reverse redlining lawsuit, requesting time to mediate and potentially reach a settlement.
In a concise 209-word motion, the parties requested a 90-day stay of all deadlines and filings in the 16-month-old case “so that mediation can be conducted and the appropriate resolution finalized.”
They argued that the pause would save time and resources for both sides, while also helping to preserve judicial resources. “The parties do not make this motion for purposes of delay, but for good cause,” the filing stated.
If mediation efforts fail, the parties said they would submit a status report to the court. A CFPB attorney did not respond to a request for comment. Jason Ray of the Austin-based firm Riggs and Ray said the motion speaks for itself and declined further comment.
Filed by the DOJ’s Civil Rights Division and the CFPB in December 2023, the lawsuit accuses Colony Ridge — a developer of a sprawling, majority-Latino community located about 40 miles northeast of Houston — of targeting Latino land buyers with predatory loans, deceptive marketing practices, and a failure to disclose the costs of utility installations.
Colony Ridge offers direct land financing, often without credit checks or income verification. Those loans carry high interest rates that some residents have found challenging to repay.
Federal officials argue that the company’s practices amount to “reverse redlining”— offering substandard financial products to protected groups who have historically been denied credit.
They allege the company’s business model is rooted in discrimination against Spanish-speaking buyers. Between 2019 and 2022, at least 30% of seller-financed lots went into foreclosure within three years, the suit claims —15 times the national average.
In September, U.S. District Judge Alfred Bennett denied a motion to dismiss, finding the “allegations, taken as true, easily satisfy the elements of a reverse redlining claim.”
The request for a stay comes amid broader upheaval in federal civil rights enforcement. Hundreds of DOJ civil rights staff have departed in recent months as the division’s priorities shift, The New York Times reported. Meanwhile, President Donald Trump’s administration has continued efforts to dismantle the CFPB. Just this week, an appeals court blocked an attempt to lay off roughly 90% of the bureau’s workforce.
Colony Ridge is also the subject of a lawsuit filed by Texas Attorney General Ken Paxton, which makes similar accusations.