OneWest Penalized for Racial Bias When Mnuchin Was Bank Chairman
OneWest Draws Penalty for Redlining When Mnuchin Was Chairman
(Bloomberg) -- OneWest Bank will pay more than $7 million to settle California Reinvestment Coalition allegations that the company engaged in racial discrimination in mortgage lending from 2014 until at least 2017, the Department of Housing and Urban Development said Monday.
Treasury Secretary Steven Mnuchin was OneWest’s chairman for some of the period in which misconduct is alleged to have occurred in the Los Angeles area. HUD said in a statement that it approved the accord between OneWest and the California group, which accused the bank of redlining. OneWest denied the claims, and said it settled to get “administrative closure.” No individuals, including Mnuchin, were accused of misconduct.
OneWest, which Mnuchin built from the remains of a bank that failed during the 2008 financial crisis, was bought by CIT Group Inc. in 2015, and now operates as a subsidiary. Mnuchin served on CIT’s board until late 2016, when he was tapped to become Donald Trump’s treasury secretary. Comptroller of the Currency Joseph Otting, who now regulates OneWest, was the bank’s chief executive officer for some of the period covered by the complaint.
Spokesmen for the Treasury Department and the Office of the Comptroller of the Currency declined to comment.
The settlement stems from a 2016 complaint about OneWest’s mortgage lending practices, which housing advocacy groups said broke federal laws by keeping branches out of minority neighborhoods and making few loans to black and Latino borrowers.
“Homeownership is the foundation of the American dream,” Anna María Farías, HUD’s assistant secretary for fair housing and equal opportunity, said in a statement. “Today’s settlement is an important step toward ensuring access to that dream for all borrowers, regardless of their race or national origin.”
In additional to the penalty, which is in the form of community investment, CIT will have to open or buy a new branch in an area that has a majority-minority population and is low-to-moderate income.
To contact the reporter on this story: Austin Weinstein in New York at aweinstein18@bloomberg.net
To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott
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