California Reinvestment Coalition

California Reinvestment Coalition Responds to Steve Mnuchin's Likely Nomination for Treasury Secretary

Published November 30, 2016 07:15

Upon hearing the news that president elect Donald Trump will likely nominate Steven Mnuchin, former chair of OneWest Bank and board member of CIT Group for Treasury Secretary, Paulina Gonzalez, executive director at the California Reinvestment Coalition released this statement today:

"If Mr. Mnuchin is nominated to the position of Secretary of the Treasury by President Elect Trump it will continue an alarming trend of a series of appointments by Mr. Trump that signals a coming attack on civil rights, working families, and consumer protections by the administration.

We expect that the Senate will dig into Mr. Mnuchin's track record, and we imagine the many families who lost their homes at the hands of OneWest will be watching closely and will also want to share their experiences as part of any confirmation hearings.

Wall Street has long argued for a loosening of regulations for the banking industry, protections put in place by the Wall Street Reform Act, otherwise known as, Dodd-Frank, and the Fair Housing Act and Fair Lending Laws enforced by the Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau. Mr. Mnunich’s nomination and his track record, detailed in a redlining complaint filed with HUD earlier this month, make it clear, the fox has been nominated to guard the henhouse.

Earlier this month, our nonprofit submitted a redlining complaint to HUD, highlighting a number of concerns about OneWest Bank and its track record in Los Angeles communities, as well as its maintenance (or lack thereof) of homes it had foreclosed on in Northern California.

Steven Mnuchin was chair of OneWest bank when most of these activities are alleged to have occurred and is now a board member of CIT Group, the owner of OneWest Bank. CIT Group is no stranger to controversy or bankruptcy, as it received over $2 billion in TARP money that it never repaid to taxpayers.

Our goal in submitting a redlining complaint to HUD is to prevent ongoing harm against borrowers and communities of color by OneWest Bank.

The complaint is based on analysis of publicly available mortgage lending data, and of OneWest branching data. In addition, Fair Housing Advocates of Northern California conducted a separate investigation into OneWest bank-owned homes and uncovered differences in how the bank maintained homes in predominantly white communities vs. neighborhoods of color.

Our analysis of the bank’s lending data revealed that OneWest’s home lending to borrowers and communities of color has been low in absolute terms, low compared to peer banks, and low when compared to what one would expect, given the size of the Asian American, African American, and Latino populations in Los Angeles.

As an example, in analyzing 2015 lending data, we determined that white borrowers were the only group where OneWest Bank had higher lending levels than its industry peers, and dramatically higher lending levels than one would expect, given the size of the white population in OneWest’s assessment areas. In comparison, its lending to Asian, African American, and Latino borrowers, has been well below the industry average and well below what one would expect, given the size of these populations.

We urge HUD to investigate these potential violations of the Fair Housing Act and to share the agency’s findings with the public as soon as possible. In the mean time, we strongly oppose having Wall Street Insiders, like Steve Mnuchin, guarding Wall Street.

We also think it is important and relevant for the public to know that this bank has foreclosed on over 36,000 families in California (and an unknown number throughout the US) and that 2/3 of these foreclosures occurred in majority minority communities.

We’re also interested to learn the results of a separate investigation by HUD’s Office of Inspector General, focused on problems with OneWest’s reverse mortgage loan servicing.  

Our own investigation into OneWest reverse mortgage foreclosures revealed that the bank was responsible for 39% of all foreclosures on federally insured reverse mortgages- despite only servicing about 17% of this market."

Additional background about OneWest Bank's track record and its merger with CIT Group is available at www.badbankmerger.com

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CRC has a membership of over 300 nonprofit organizations and public agencies across the State.