Bank Led By Donald Trump’s Top Treasury Contender Accused Of Racist Lending

ASSOCIATED PRESS A California bank led by Donald Trump’s reported likely treasury secretary, Steven Mnuchin, is facing new allegations of racist lending practices. OneWest failed to locate bank branches in minority neighborhoods, loaned money to “very few or no” people of color, and did a better job maintaining and marketing foreclosed homes in mostly white neighborhoods, according to a complaint filed by two housing advocacy groups Wednesday with the U.S. Department of Housing and Urban Development. The discrimination, called “redlining,” keeps communities of color in poverty by making it harder to buy homes. It was banned in 1968 under the Fair Housing Act. The complaint was filed against CIT Group, the commercial lending giant that owns OneWest. Mnuchin, who led the investor group that bought OneWest in 2009 and served as its chairman, joined the board of CIT after the acquisition was completed in August 2015. “Our analysis of OneWest suggests the bank has no significant branch presence in communities of color,” Kevin Stein, deputy director of California Reinvestment Coalition, one of the two nonprofits that filed the complaint, said in a statement. “[N]ot surprisingly, its home loans to borrowers and communities of color are low in absolute terms, low compared to its peer banks, and low when compared to what one would expect, given the size of the Asian American, African American, and Latino populations in California.” Neither CIT nor Dune Capital, the hedge fund where Mnuchin works, responded to requests for comment on Wednesday. In the Los Angeles area in which OneWest operates, black borrowers last year received just 1.7 percent of its mortgages ― 2.1 percentage points below the industry average. Asian Americans made up 8.4 percent of the bank’s borrowers ― 3 percentage points below the industry average. Latinos comprised an additional 8.4 percent of borrowers ― 14 percentage points below the industry average. Meanwhile, the bank awarded 82.4 percent of its loans to white people ― 14.6 percentage points above the industry average. A chart included in the complaint compares the percentage of OneWest loans by demographic to the industry average and the percentage of those populations in Los Angeles. One-hundred percent of foreclosed homes ― also known as real estate-owned properties ― in neighborhoods of color had five or more maintenance or marketing failures, including trash strewn in the front yard, overgrown grass and shrubbery, and boarded up or broken doors and windows. By contrast, 33.3 percent of foreclosed properties in white neighborhoods sustained the same blight. The complaints cast an ugly light over the man Trump officials have floated as the leading candidate to lead the Department of Treasury. Mnuchin led the group of investors that bought OneWest, then called IndyMac Bank, from the Federal Deposit Insurance Corp. in 2009 after the company had collapsed under the weight of bad home loans it made during the housing bubble. As part of the deal, the FDIC agreed to take the hit for the vast majority of loan losses, an arrangement the agency made with […]

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