On President Trump’s 100th day in office, members of his cabinet gathered to report on their accomplishments.

The Treasury and commerce secretaries talked about tariffs, Secretary of State Marco Rubio gave an update on foreign aid cuts and Defense Secretary Pete Hegseth boasted about troop deployments at the nation’s borders.

When it was his turn, Russell T. Vought, the White House budget office director and interim head of the Consumer Financial Protection Bureau, highlighted a more obscure accomplishment.

“We found this small mortgage lender in Chicago. His name is Barry Sturner,” Mr. Vought told the president. “He had a firm called Townstone, and C.F.P.B. had gone after him because he complained about crime in Chicago.”

For years, Mr. Sturner had battled a lawsuit by the consumer bureau accusing the company he founded, Townstone, of “redlining” — the practice of illegally limiting the ability of nonwhite people, especially Black households, to obtain mortgages and buy homes in certain areas.

A linchpin of the bureau’s case were comments Mr. Sturner made years ago on his Chicago talk radio show. On a few episodes, he criticized several predominantly Black neighborhoods as crime-ridden and filled with “scary” people.

To the bureau, those comments were a sign of racial bias and Townstone’s way of telling Black borrowers that their business was not wanted.

To Mr. Vought, that claim was an infringement on Mr. Sturner’s free-speech rights. And it was an injustice he was determined to undo.

The bureau’s case against Mr. Sturner “ruined his life,” Mr. Vought told the president at the April cabinet meeting.

“We overturned that,” he said, adding that the bureau had “apologized on your behalf to the individual.”

What Mr. Vought didn’t mention during the cabinet meeting was that the case against Townstone was brought during Mr. Trump’s first term — at the peak of the nationwide protests over George Floyd’s murder. It’s a reminder that even the first Trump administration was not immune to the pressures in the summer of 2020 to address issues of racial discrimination.

But Mr. Vought’s current efforts to undo the case — and his broader campaign to weaken the consumer bureau — shows just how much the policy priorities of the second Trump administration differ even from those of the first administration.

Since its founding after the Great Recession, the consumer bureau has overhauled the mortgage market to rein in risky loans, forced lenders to disclose fees more clearly and compelled financial companies to return $21 billion to customers through refunds and canceled debts.

The agency — the brainchild of Elizabeth Warren during her time as a Harvard law professor — has taken a broad view, at times, of its authority to police consumer finance laws.

Wall Street leaders and their Republican allies often complain that the bureau pushes the boundaries of consumer protection laws by engaging in “regulation by enforcement,” the practice of declaring ambiguous conduct to be illegal and suing to stop it.

The Townstone case has become something of a Rorschach test for the consumer bureau. It epitomizes much of what the progressive left and the anti-regulation right like or loathe about the agency.

Consumer watchdogs viewed the suit as a sign of the agency’s commitment to an expansive view of fair-lending laws. Creating conditions that discouraged a Black borrower from applying for a loan was, the lawsuit argued, just as illegal as rejecting the borrower because of his or her race.

Critics see it as an example of the government’s abusing its power to crush a business owner who spoke disparagingly of Black neighborhoods and crime in the Democratic-led city of Chicago. It’s a rallying cry among Republicans that the left tries to punish people for speech it doesn’t like.

To correct what he believed was wrong with the Townstone case, Mr. Vought has tried to push boundaries himself. He sought to rescind the settlement that Mr. Sturner and the bureau reached in late 2024, in which Townstone agreed to pay the federal government $105,000.

Settlements are supposed to be final. Regulatory lawyers said they could not recall a time when the federal government had tried to vacate one in a civil case.

Many of Mr. Vought’s critics see the focus on Townstone as part of the Trump administration’s sweeping assault on civil rights protections.

“It’s lost on no one that when they undertook reversing a case, they picked a case about racial discrimination,” Ms. Warren, a Massachusetts senator, said in an interview.

Fifteen Minutes of Airtime

Mr. Sturner’s hometown, Chicago, is the city that gave “redlining” its name.

The term was coined in the 1960s by John McKnight, a community activist and urban affairs professor, to describe the federal government’s decades-long policy of refusing to guarantee mortgages in areas it deemed “risky.”

The red lines were literal. They appeared on maps of Chicago drawn by the Home Owners’ Loan Corporation, a federal entity created during the New Deal to stave off foreclosures, to separate areas considered safe for investment, rated A and marked in green, from “hazardous” areas. Those were given a D rating and colored red.

Overt discrimination in mortgage lending was outlawed by the Fair Housing Act in 1968, but the consequences still reverberate. Researchers have documented how, generations later, redlined boundaries had a lasting effect on homeownership rates, property values and even household credit scores.

In 2017, analysts at the consumer bureau ran a “redlining screen” on mortgage records and looked at the race of borrowers. Townstone popped up: It was one of roughly 75 companies with lending so skewed that the bureau’s employees thought it warranted a closer look.

From 2014 to 2017, Townstone averaged fewer than 700 mortgage applications per year. Roughly 1.4 percent of those came from Black borrowers in and around Chicago, according to the consumer bureau’s analysis; at other Chicago-area lenders, nearly 10 percent of the applications were from Black customers. And for homes in majority-Black neighborhoods in and around Chicago, Townstone’s application volume was barely a quarter of that seen at other mortgage merchants, the bureau said.

Mr. Sturner, who spent a few years as an agricultural products trader before switching to the mortgage industry, said he had built up his loan business through word-of-mouth referrals from friends, family and former customers.

But the bureau said these disparities were not merely a result of Mr. Sturner’s social circles and business networks. In its lawyers’ view, he had actively discouraged Black customers from doing business with him.

As evidence, the agency cited Mr. Sturner’s public comments on the “Townstone Financial Show,” a local talk radio segment that he and his employees started in 2012.

The comments that got Mr. Sturner in trouble with the consumer bureau totaled around 15 minutes of airtime across nearly 80 hours of episodes.

On a show in June 2016, Mr. Sturner praised Chicago’s police officers for putting themselves at risk to protect the city. Officers he knew described the South Side from Friday to Sunday as “hoodlum weekend,” turning the neighborhood, Mr. Sturner said, into a place that resembled scenes from “The Warriors,” a 1979 film about street-gang battles. Chicago’s police force was all that kept the area from “turning into a real war zone,” he said.

On a January 2017 episode, Mr. Sturner described a Jewel-Osco grocery store in Chicago’s South Loop as a spot that used to be known as the “Jungle Jewel,” and a deterrent for home shoppers.

“There were people from all over the world going into that Jewel,” he said. “It was a scary place.”

The Jewel, the only grocery store in the area, drew shoppers from Cabrini-Green, a giant public housing project.

Its derisive nickname was widely known. In a Chicago Sun-Times column in 2000, Richard Roper wrote about the safari-themed toys sold at the store, which had a heavily Black clientele. Some white residents “call it the Jungle Jewel,” Mr. Roper wrote. “And it has nothing to do with any stuffed animals being sold.”

Mr. Sturner said he considered the show a fun project, not a serious marketing effort. Only a few hundred people tuned in.

In an interview, Mr. Sturner said he viewed his comments as opinions about his hometown that many residents shared. He didn’t consider them offensive, he said, but even if others did, he regarded them as constitutionally protected free speech.

Bureau lawyers, however, considered his words “disconcerting” and said they “could be interpreted as inappropriate, incorrect or insensitive,” according to an internal memo quoted in court filings. They deemed the comments exempt from free-speech protections because they were “commercial speech.”

A few months after his comments about the Jewel grocery store, Mr. Sturner received a civil investigative demand — the subpoena that federal regulators use at the start of an investigation. He assumed it was a standard compliance request and sent in the requested answers. Months later, the agency asked him to show up for a deposition. He went without a lawyer.

What he figured would take a few hours stretched into the evening. When he asked for a bathroom break, a bureau official went along and stood outside the door. That was when he started to sense that he was in trouble.

“It’s like I was in a prison there with him,” Mr. Sturner said. “That’s the way he made me feel.”

No Admission of Wrongdoing

For the next two years, the bureau’s Townstone investigation inched along. But after Mr. Floyd’s murder, pressure mounted on the bureau to do its part in addressing discrimination.

In July 2020, as protests over Mr. Floyd’s murder swept the country, the bureau sued Townstone.

Kathy Kraninger, the Trump appointee who was heading the bureau, cited the Townstone lawsuit as an example of her commitment to enforcing fair-lending laws.

The bureau “is taking steps to help create real and sustainable changes in our financial system so that African Americans and other minorities have equal opportunities to build wealth,” she told a congressional committee.

Before it sued, the bureau offered to settle the matter, but the sum it sought — $1.3 million — was more than what Mr. Sturner was willing to pay. And he hated the idea of making a deal when he felt he hadn’t done anything wrong.

“For me, it’s always been the principle,” he said.

For more than four years, Mr. Sturner fought the bureau in court. And in early 2023, he had a taste of success: A federal judge in Chicago dismissed the lawsuit, ruling that the fair-lending law the agency cited applied only to actual applicants.

No Townstone applicants had ever complained to the bureau about being rejected. Of the 10 million complaints the agency has received about financial companies, only two concerned Townstone.

But the bureau appealed, and in July 2024 a panel of three judges from the U.S. Court of Appeals for the Seventh Circuit — all appointed by Republican presidents — unanimously reversed the District Court decision.

The Equal Credit Opportunity Act “prohibits not only outright discrimination against applicants for credit, but also the discouragement of prospective applicants for credit,” they wrote.

Lawyers thought the issue, which cut to the core of how the nation’s fair-lending laws should be interpreted, might end up at the Supreme Court. Then, as the November presidential election approached, the bureau made Mr. Sturner an offer he felt he couldn’t refuse: Pay a $105,000 fine and settle the case.

The deal included no admission of wrongdoing on Townstone’s part. And it contained a subtle detail that meant a lot to Mr. Sturner: The bureau dropped his name from the list of defendants in the case, leaving only his company, Townstone Financial.

After more than $1 million in legal expenses and seven years of wrangling, he took the offer. The lawsuit was finished.

Then Mr. Vought took over the bureau.

In early March, an agency official rang Townstone’s lawyers. The bureau’s new leaders were deeply troubled by the case and wanted to do something unprecedented: ask the federal court in Chicago to reopen the case, vacate the settlement and allow the bureau to give Mr. Sturner his $105,000 back. Would Townstone agree to join the request?

The call came “pretty much out of the blue,” said Steve Simpson, one of Townstone’s lawyers. “Of course we said yes.”

The bar to reopening a settled case is extremely high. To meet the legal standard — “extraordinary circumstances” — the consumer bureau needed evidence of a grievous mistake. The task of finding it fell to Dan Bishop, Mr. Vought’s deputy at both the budget office and the bureau.

What he learned as he looked into the agency’s records alarmed him, Mr. Bishop said.

Mr. Bishop said career bureau staff “misled their superiors” and gave the former director, Ms. Kraninger, deceptive answers to her questions about the Townstone investigation. (Ms. Kraninger did not respond to requests for comment.)

“It was so outlandish,” he said. “The basic facts seemed to have produced a completely disproportionate response by this agency.”

‘The Agency Persists’

In his efforts to hobble the consumer bureau, Mr. Vought has largely succeeded.

He has halted nearly all of the agency’s operations, closing its headquarters and canceling the building’s lease. He dismissed most of the agency’s pending lawsuits, stopped investigations and canceled bank examinations. He is trying fire 90 percent of the bureau's workers; judicial orders have paused the terminations while an appellate court considers their legality.

But Mr. Vought’s assurances to Mr. Trump about the Townstone case — “we overturned that” — were premature.

In mid-June, Judge Franklin U. Valderrama of the U.S. District Court for the Northern District of Illinois rejected the administration’s request to vacate the deal. He called the flip-flop on a lawsuit that the first Trump administration had brought “an act of legal hara-kiri that would make a samurai blush.”

And creating the precedent of overturning a settlement is “a Pandora’s box the court refuses to open,” he wrote.

Consumer advocates — and many bureau employees who worked on the case — took the judge’s decision as a rare win in a bleak time, as the agency fights for its survival.

“The Republicans have tried to kill off the consumer agency since the day it was born,” Ms. Warren said. “And the agency persists.”

As for Townstone, the legal costs of the case, combined with the dire housing market, had taken its toll. Soon after settling the case, Mr. Sturner closed down his company and took a job as a branch manager with a national mortgage lender. He ended his radio show in 2018.