Judge Questions Lack of Victim Compensation in $68M Settlement

Federal judge raises concerns over DOJ settlement with Texas land developer over predatory lending allegations.

Apr. 11, 2026 at 7:25am

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An extreme close-up of a foreclosure notice or mortgage document, the harsh lighting and stark black background creating a gritty, investigative aesthetic that conceptually represents the legal dispute over alleged predatory lending practices.A federal settlement over alleged predatory lending practices raises questions about the allocation of funds and the lack of direct compensation for victims.Houston Today

The U.S. Department of Justice is proceeding with a $68 million settlement with a Texas land developer despite warnings from a federal judge that the agreement fails to provide meaningful relief to victims of alleged predatory lending. The settlement resolves a legal dispute involving the Colony Ridge development in the Houston suburbs, but a significant portion of the funds are earmarked for policing and immigration enforcement rather than direct compensation for the individuals harmed.

Why it matters

The allocation of settlement funds to law enforcement and immigration efforts has raised concerns that the vulnerable populations victimized by the developer's alleged predatory lending practices could potentially be targeted again. Legal experts argue the deal fails to adequately address the original consumer fraud allegations.

The details

The legal action began in December 2023 when the Justice Department and the Consumer Financial Protection Bureau sued the developer, accusing them of using false advertising to attract Hispanic applicants into high-interest loans they could not afford. During a hearing, U.S. District Judge Alfred H. Bennett expressed discomfort with the terms of the settlement, questioning the shift in focus from consumer fraud and victim relief to public safety and law enforcement. Despite the judge's concerns and the developer's willingness to consider changes, the Justice Department declined to revise the agreement and is moving forward with the settlement as written.

  • The legal action began in December 2023.
  • The $68 million settlement is currently being finalized.

The players

U.S. Department of Justice

The federal agency that filed the original lawsuit against the Texas land developer and is now proceeding with the $68 million settlement.

U.S. District Judge Alfred H. Bennett

The federal judge who expressed concerns about the lack of victim compensation in the settlement agreement during a court hearing.

Colony Ridge

The Texas land development at the center of the legal dispute, which was accused of using predatory lending practices to target Hispanic residents.

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What they’re saying

“Where Did That Come From?”

— U.S. District Judge Alfred H. Bennett

What’s next

Judge Bennett suggested revisions to the settlement to ensure victims of the predatory lending are compensated, and the developer indicated they would consider the judge's suggestions. However, the Justice Department declined to revise the agreement and is moving forward with the settlement as written.

The takeaway

This case highlights concerns over the Justice Department's priorities in settlement agreements, where funds are allocated to law enforcement and immigration efforts rather than direct compensation for victims of alleged consumer fraud. Legal experts argue the deal fails to adequately address the original allegations of predatory lending targeting vulnerable populations.