CFPB sues 1st Alliance Lending for alleged unlawful mortgage lending practices

The Consumer Financial Protection Bureau on Jan. 15 filed a lawsuit against 1st Alliance Lending LLC, John Christopher DiIorio, Kevin Robert St. Lawrence and Socrates Aramburu for allegedly engaging in various unlawful mortgage lending practices, according to a CFPB news release.

Connecticut-based 1st Alliance Lending originated residential mortgages from 2004 to September 2019 and stopped operating in November 2019. DiIorio was its CEO and he, St. Lawrence and Aramburu were 1st Alliance Lending's three managing executives.

In its complaint, the CFPB alleges that 1st Alliance Lending, with the participation, knowledge and direction of the three executives, violated the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Mortgage Acts and Practices-Advertising Rule, and the Consumer Financial Protection Act of 2010.

Since at least 2015, in the course of its mortgage lending business, 1st Alliance Lending used unlicensed employees to engage in mortgage origination activities and interactions with consumers that required them to be licensed under state law, in violation of TILA and Regulation Z, according to the bureau's complaint. The CFPB further alleges that the company's use of unqualified sales employees to deprive consumers of critical, accurate and timely loan information was unfair. Additionally, the bureau alleges that 1st Alliance Lending violated Regulation Z by requiring consumers to submit documents verifying information relating to the consumer's residential mortgage loan application before providing them a loan estimate.

During this same period, 1st Alliance Lending employees denied credit to consumers based on information in their consumer report or in response to their application but did not give consumers the "adverse action" notice required under the Fair Credit Reporting Act and the Equal Credit Opportunity Act, according to the CFPB's complaint. The bureau further alleges that 1st Alliance Lending representatives repeatedly engaged in misleading representations, omissions or practices toward consumers.

The CFPB's complaint was filed in the United States District Court for the District of Connecticut. It seeks injunctions against the defendants, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.