EVERYBODY’S BUSINESS - Migrant Intimidation Masquerading as Consumer Protection
Written by SP Editor
It came as quite a surprise to see a Justice Department press release announcing that its Civil Rights Division had secured a $68 million settlement from a real estate developer accused of targeting Hispanic borrowers through predatory land sales.
That's because the announcement stood in stark contrast to the recent track record of the Division, which has seen a sharp drop in resolved cases under Trump 2.0, and most of those that have been completed have tended to target DEI and so-called reverse discrimination.
When you read the details of the announcement, the settlement with Colony Ridge LLC starts to look like less of an anomaly. First, it turns out that the case was originated by the Biden Justice Department in 2023 along with the Consumer Financial Protection Bureau. The CFPB, which is in limbo amid the Trump Administration's moves to dismantle it, dropped its claims in the case rather than participating in the settlement.
Second, the $68 million price tag of the settlement includes nothing in the way of a civil penalty or any kind of compensation to the victims of the predatory practices, which included seller-financed loans that were provided without a meaningful assessment of a borrower's ability to repay and carried high interest rates that led to an elevated level of defaults and foreclosures.
Most of the settlement total ($48 million) represents the cost of infrastructure improvements required to be made by Colony Ridge, which was accused of deceiving buyers about the flood risks in its subdivisions outside Houston.
The remaining $20 million is supposed to pay for increasing the law enforcement presence at the subdivisions. This is highly unusual and maybe unprecedented-in a consumer protection case. What is even stranger is that the settlement agreement specifies that these funds should primarily be used by the local sheriff's office to help federal agencies with immigration enforcement. Colony Ridge also agreed to a series of measures to tighten its buyer identification procedures and "work with law enforcement to confirm that buyers are not on a published terrorism watch list and are not known members of a transnational criminal organization."
At this point, it should be noted that the Justice Department was not the only party settling with Colony Ridge. The Texas Attorney General's Office, which had sued the company separately, was also involved.
A strident press release issued by Texas AG Ken Paxton put the immigration issue at the center of the case. In fact, it alleged that Colony Ridge was involved in "the development of a de facto illegal immigrant community." Paxton went on to make the incredible assertion that "Colony Ridge endangered American citizens by allowing illegal aliens to run rampant on its streets, in its schools, and in its community." The release sounds more like something written by ICE rather than an announcement from a consumer protection agency.
These statements are the culmination of a rightwing campaign that since 2023 has depicted the Colony Ridge subdivisions as a haven for undocumented immigrants. While the Biden Administration had sued the company for exploiting Latino homebuyers, Texas officials depicted Colony Ridge as in effect a co-conspirator in a purported effort to create an "illegal immigrant" town that was supposedly filled with gangs and cartel members. The settlement implied that the homebuyers were somehow complicit in this imaginary plot rather than victims of unscrupulous business practices.
The hysteria around Colony Ridge was fueled by unfounded allegations pushed by the likes of far-right U.S. Rep. Brian Babin and the immigrant-bashing Center for Immigration Studies. In 2023 Congressional testimony, CIS fellow Todd Bensman painted Colony Ridge as a place where "legacy residents [presumably White] are increasingly alarmed by criminal atrocities never seen before."
Once Donald Trump was back in office, one of the first immigration enforcement surges occurred in Colony Ridge, apparently at the urging of Gov. Greg Abbott. More than 100 people were taken into custody by ICE, supported by the Texas Department of Public Safety and the Texas National Guard.
What all this indicates is that the settlement with Colony Ridge should not be taken as a sign that the Trump Justice Department, much less the Texas AG, is now concerned about Latinos being targeted by predatory lenders.
This case has little to do with consumer protection and is really just another way of demonizing and intimidating undocumented migrants, even when they are trying to live the American Dream by becoming homeowners.
Philip Mattera heads the Corporate Research Project in Washington, DC, and writes the blog Dirt Diggers Digest
